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First Cut: MNI-ISM Chicago index remained below the 50-mark for a second month in July

The MNI-ISM Chicago Business Barometer remained below the 50-mark for a second month, falling to 44.4 in July from 49.7 in June. The report said this was “the second sub-50 reading in 30 months” and noted that four of the five components signaled contraction “with only Supplier Deliveries above 50”. The only component to firm from the prior month was order backlogs, and those were still weak. Employment and production were down in addition to new orders.

The MNI-ISM Chicago index has a solid correlation with the ISM Manufacturing Index (0.848) although the survey includes a large share of service sector respondents. The low reading suggests that the downside risks for the national report at 10:00 ET on Thursday, August 1 are greater.

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