From the Wall Street Journal entitled: Chicago Fed: Cars Drag Down Midwest Manufacturing Activity.
Manufacturing activity slowed in the Midwestern U.S. during August, as automakers chose to stop building up inventories, the Federal Reserve Bank of Chicago reported Monday.
The Chicago Fed’s Midwest Manufacturing Index dropped 1.4% to a seasonally-adjusted level 79.9 in August, from a downwardly revised 1.9% in July. The July index stands at 81.0, down from the original estimate of 81.4.
What in the world? The inconsistencies continue. The new orders portion of the Chicago PMI. The regional Fed numbers that have come out the last week showed weak or declining orders. The most ridiculous part of the Chicago PMI was that prices paid (so input prices) came in at 55 versus 57.2. All the regional Fed indexes saw big increases in prices paid.
So the question is what in the world is going on? These things don't actually measure output. They are surveys. Does the Chicago PMI focus more on Catepillar (which is booming) and less on the general economy? What is the real picture?
One thing is for sure. The number this morning is bullish dollar and the stock market is one massive currency trade right now. If this reverses the dollar the market is going to have problems.
I tried to bet a friend $10 paying 2 to 1 that the market would end down today after this number was released. He wouldn't take it. It is going to be interesting. Bull runs often end in a burst of positive news. Like I said this number is bullish dollar which has been bearish stock market. Tomorrow the ISM number comes out. Will that match the Fed regional numbers or the Chicago PMI? Good grief we lived in a messed up world.