Chicago PMI Disappoints As Economic “Reality Gap” Reaches 11-Month Highs

Ahead of today’s miss on Chicago PMI (60.4 vs 62.0 exp), ‘soft’ survey data has been surging as ‘hard’ real data has been slumping. The ‘reality gap’ is now at its widest in 11 months…

Chicago PMI dropped to its lowest since April… September’s drop is the largest since March…

Only 3 of the factors rose MoM:

  • Prices paid rose at a slower pace, signaling expansion

  • New orders rose at a slower pace, signaling expansion

  • Employment rose at a slower pace, signaling expansion

  • Inventories rose at a faster pace, signaling expansion

  • Supplier deliveries rose at a faster pace, signaling expansion

  • Production rose at a slower pace, signaling expansion

  • Order backlogs rose at a faster pace, signaling expansion

But Chicago’s disappointment bucked the recent trend in ‘soft’ survey data that has pushed the gap between hope and reality to 11-month highs…