Chicago PMI flounders

Volatility isn't cause for alarm

Following three-consecutive monthly gains, the Chicago Purchasing Managers Index fell from 50.0 in August to 46.1 in September, well below the forecast offered up by Bloomberg News of 52.0.

A decline like that would be a bit unsettling if it occurred in the ISM Manufacturing Index, but the Chicago PMI, which looks at manufacturers in the Midwest, is fairly volatile so such a pullback isn't that unsettling, in my view.

The overall trend in the Chicago PMI is still to the upside and tomorrow's release of the ISM Manufacturing Index, which is expected to rise from 52.9 to 53.5, will provide a clearer picture of what's been happening among manufacturers during September.

A reading of 50 marks the line between contraction and expansion for both surveys.