The Midwest is still in contraction

The Bean Chicago

(Shutterstock / f11photo)

The Midwest is still in contraction.

The Chicago Purchasing Manager Index climbed to 49.4 from 46.2 last month, missing expectations.

Economists had forecast that the index read at 50 for June, according to Bloomberg. That's right on the border of expansion (above 50) and contraction (below 50.)

This is the fourth straight month that the index has signalled a contraction.

The rebound from last month was led by an 8.8% increase in new orders to 51.7.

The report further noted that its employment indicator fell to the lowest level since 2009, "pointing to a slowdown in the pace of hiring."

In the release, Philip Uglow, chief economist of MNI Indicators, said: “While the latest increase in New Orders is a tentative sign of a pick-up in demand over the coming months, there is no getting away from the general softness in the data. The Barometer hit a 5½ year low in Q2 and the weakness is having a detrimental impact on the level of hiring.”

Still, the report noted that companies are still optimistic about the short-term outlook.

Here's the latest chart of the index showing it is crawling towards 50.

chicago pmi

(MNI Indicators)

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