Chicago Business Barometer Revised Lower In Second Half Of 2016 - Downward Revisions To Inventories, Production

The December Chicago Business Barometer was revised down to 53.9 from 54.6 previously, as a result of the annual seasonal adjustment recalculation.

In aggregate, the Barometer was revised lower by 0.6 points in 2016. It was down by 1.2 points over H2 2016 with the majority of that revision coming in Q3. Activity during the first half of the year was revised higher. The most significant downward revision in the Barometer came in June, with the sharp spike inactivity revised lower. The second largest revision came in July. The revisions suggest that activity was softer during the second half of the year, in contrast to the previous data which had showed greater strengthening.

Inventories were revised down by a total of 5.1 points in H2 2016 and by 0.6 points in aggregate in the entire year. Production was revised lower by a total of 4.1 points in H2 and by an aggregate of 0.4 points in 2016. New Orders was the only component of the Chicago Business Barometer which was revised higher during H2. It went up by an aggregate of 0.6 points in the second half of the year.

All series in the Chicago Report are seasonally adjusted by the Census Bureau’s X-12 procedure and the seasonal adjustment factors are recalculated annually every January.