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Softer Recovery in Activity Across 2021
The Chicago Business BarometerTM, produced with MNI, was revised up to 64.3 in December from 63.1, as a result of the annual seasonal adjustment recalculation.
Despite the upwards revision at the end of the year, in aggregate, the Barometer was revised down by -0.1 point in 2021 and revised up by +0.1 point in 2020.
Growth in the first half of the year was softer than previously estimated. Including the Barometer, 8 out of 11 activity metrics in the survey were revised lower in H1-2021. May saw the largest downward revision, with the Barometer revised lower 1.9 points to 73.3 from its initial reading of 75.2, while November recorded the biggest upward revision of +1.6 point to 63.5. This softer pace of recovery extended to Q3 with the Barometer revised lower by 0.3 points to 68.0 in Q3.
Despite these downward revisions, the Barometer has been in expansion territory since July 2020 and most of the survey indicators have remained well-above the 50 level in recent months showing a strong bounce back in activity.
Q4 2021 was revised higher for the Barometer and 4 of its 5 components suggesting there was an upturn in activity by the end of the year. Production saw the largest revision in Q4, revised up by 1.2 point. Only Employment ended 2021 in contraction territory.
Overall, data from the Chicago survey saw minor revisions. However, the strong impact of the pandemic on activity along with uncertainty about the path of economic recovery given the resurgence of Covid-19 cases may lead to further changes in the future as new incoming data reveals the final influence of the pandemic on the trend component.
All series in the Chicago Report are seasonally adjusted by the Census X-12 procedure and the seasonal adjustment factors are recalculated annually every January.
