Chicago PMI Shows Big Surprise Drop, "Business Slowing Down Right Now," Respondents Say

May 31, 2012 10:19 AM EDT
Markets are moving lower today after Chicago PMI decreased for the third consecutive month, suggesting a softer economy than previously estimated. The index measures business conditions based on surveys of purchasing managers across Illinois, Indiana and Michigan.

The biggest shocker to markets was the report on production and new orders, which was the lowest since 2009. All seven business activity indexes declined in May, with a reading of 52.7 vs. the consensus estimate of 56.8.

One company in the survey commented that "Business is slowing down right now. We had a decent first quarter but its gotten quiet."

Another company commented that "Uncertainty, volatility and speculation rule the raw material pricing market. This is having significant impact on our ability to compete, reinvest, and grow our business."

SPDR S&P 500 (NYSE: SPY), and ETF that tracks the S&P 500 is down 0.75 percent and trending lower. CurrencyShares Japanese Yen Trust (NYSE: FXY), which tracks the spot rate of the USD vs. the Japanese Yen is moving lower as well.

Crude oil is breaking down, with WTI futures breaking below $87 per barrel.

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