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The Chicago Business BarometerTM, produced with MNI, improved by 4.8 points to 48.6 in April. This was the highest reading since August 2022. Nonetheless, the headline index remained sub-50, thus signaling an eighth consecutive month of contractionary business activity. However, we note that the non-seasonally adjusted Chicago Business BarometerTM rose to 50.8, above 50 for the first time since August 2022.
All subindexes except Order Backlogs and Inventories increased in April. Employment recorded the strongest increase with the sharpest fall for Inventories. Employment, Supplier Deliveries and Prices Paid were expansive (above 50) in April. All other subindicators indicated contraction (below 50).
Employment saw a marked 8.5-point boost, reaching above 50 for the first time since August. Anecdotal evidence suggested successful recruitment activities in April. The share of firms reporting lower employment in April was the least in 2 years.
Prices Paid accelerated by 4.7 points but remained a little below January levels and the 12-month average.
Production rose for a second month in April, up 6.9 points, to the second highest reading since August and 1.4 points above the 12-month average. Some firms noted production having returned to around pre-pandemic levels.
New Orders increased by 3.1 points, the least contractive since August 2022.
Supplier Deliveries gained 5.6 points, indicating lengthened lead times. Logistics issues including delays at customs, labor shortages and poor communication persist.
Inventories dropped a notable 9.8 points back into contractionary territory in April, giving back the bulk of the March increase. Responses were varied, including some evidence of elevated stock levels as firms noted stronger order books.
The Order Backlogs subindex was broadly in line with the March reading, down -0.1 points
