Chicago PMI Plunges to 37.9, Stagflation Looms
Remember the good times back in November 2023 when the Chicago PMI was at its highest point in two years?
Well, things have taken a turn for the worse since then.
The PMI has been on a downward spiral for five consecutive months.
April's data just came out, and it's not what we hoped for. Instead of going up to 45.0 as expected, it's dropped to a dismal 37.9
According to Bloomberg, this five-month decline is the most severe since the days of Lehman Brothers. But there's more bad news. The underlying data is showing signs of stagflation:
Prices paid are rising quickly, suggesting expansion.
New orders are falling rapidly, indicating contraction.
Employment is decreasing at an accelerated rate, also indicating contraction.
Inventories are shrinking, although at a slower pace, still indicating contraction.
Supplier deliveries are slowing down faster, signaling contraction.
Production is declining rapidly, confirming contraction.
Order backlogs are decreasing, although at a slower pace, still indicating contraction.
In short, everything is contracting faster than anticipated, dragging our hopes down to the lowest levels of the Bidenomics cycle.
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