Chicago PMI Drops in August and Misses Market Expectations

The Chicago Business Barometer climbed to 58.8 in September 2026 from 47.1 in August and well above forecasts of 51.2, marking a renewed expansion in Chicago's business activity. This was the strongest pace of growth since May, as production expanded 15.5 points to the highest level since May, returning to expansionary territory after contracting in August. Also, new orders rose 13.3 points, with some respondents citing a seasonal improvement in demand. Supplier deliveries rose 9.6 points, extending their growth to a 20th consecutive month, while inventories edged down. Meanwhile, employment fell 4.3 points, returning to contraction after one month of expansion. Fewer respondents reported higher employment, while reports of workforce cuts edged up, with some citing outsourcing. Prices paid eased 3.7 points to around July’s level, but price pressures remained elevated.

The Chicago Business Barometer plunged to 47.1 in August 2026 from 57.6 in July and missing market forecasts of 58.3. The latest data pointed to a renewed contraction in business activity and the steepest since December 2025. New orders declined sharply, dropping 15.4 points, but still above April's low. The production gauge slipped 8.8 points, recording its first and sizeable contraction since last December. Meanwhile, supplier deliveries eased 2.6 points, but remained in expansion for the 19th consecutive month. On a more positive note, employment rose 4.3 points, moving into positive territory for the first time in five months, although the improvement was marginal. On the price front, price pressures intensified. Prices paid jumped 3.8 points to their highest level since February 2022, with some firms reporting higher metal costs.

The Chicago Business Barometer rose to 57.6 in July 2026 from 56.7 in the previous month, remaining in expansionary territory for a third straight month and topping market expectations of 56.0. The increase was driven by new orders, which climbed to their highest level since January 2022. Meanwhile, supplier deliveries weakened, while order backlogs slipped back into contraction after two months above the neutral 50 mark. Employment remained in contraction for a fifth consecutive month, falling to its lowest level since March, while production eased but stayed in expansion. Prices paid was little changed, as respondents continued to cite geopolitical tensions and elevated energy costs despite signs of improving price stability.