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First Cut: December MNI-ISM Chicago Business Barometer still strong, but hints at cooling conditions

The MNI-ISM Chicago Business Barometer for December slipped 1 point to 65.4 from 66.4 in the prior month. The decline was minor and still left the index level among the higher ones in 2018. The Chicago survey includes respondents from both the service and manufacturing sectors, so its movement is not necessarily indicative of the direction of the ISM Manufacturing Index. Nonetheless, it does line up with the tone of the majority of other reports for both sectors that suggests conditions are at least mildly less expansionary.

I would also note that the index had three of five components move lower. The report said there were “solid gains” in production and order backlogs that offset some of the downward movements. This means that orders were off, inventories were higher, and supplier deliveries slower. All of these could be an indication of a cooling in conditions.

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