Business activity in the American Midwest was negative for the first time since September 2009 according to today's regional reports from the Institute for Supply Management.
April measures from the Chicago and Milwaukee purchasing managers' surveys (PMI) unexpectedly fell to 49.0 and 48.43 respectively, below the 50 division between expansion and contraction and missing their forecasts by wide margins. Economists had predicted that Chicago's gauge would rise to 52.5 from 52.4 in March and Milwaukee’s to climb 51.50 from 50.98.
These are the last two regional PMI surveys before tomorrow's national report which is expected to indicate that manufacturing maintained a tenuous expansion at 50.7 in April down from 51.3 in March
Most of the component indicies in the traditional manufacturing area of the Midwest were lower.
The Chicago area employment measure sank to 48.7 in April from 55.0, the weakest since last December and except for that month the lowest since December 2009. Production dropped to 49.9 from 51.8; order backlog to 40.6 from 45.0 and prices paid to 51.0 from 61.0. New orders rose to 53.2 from 53.0 in March.
In the Milwaukee region employment slid to 49.37 in April from 55.99 the prior month; new orders dropped to 42.71 from 50.33, the lowest reading since last October; production skidded to 48.06 from 53.23 and inventory rose to 51.79 from 44.23.
In a separate report from the business group The Conference Board, nationwide US consumer confidence jumped to 68.1 in April, well ahead of the 61.0 forecast. The March score was revised to 61.9 from 59.7.
Judgment on the current economic situation rose to 60.40 in April from 59.29 and expectations for conditions in six months climbed to 73.30 in April from 63.70 in March. It was the best reading since last November. Those who said jobs were plentiful increased slightly to 9.80 from 9.50 as did the percentage of those who said jobs were hard to get at 37.10 from 35.40.
Chief Market Strategist