Thursday, December 28, 2006

Chicago and Regional Economic News

Quite a few important and positives reports are summarized in the Chicago Tribune story below. I've reprinted an excerpt below

Fiscal readings exceed forecasts: Economy showing unexpected strength
By James P. Miller, Tribune staff reporterPublished December 28, 2006, 7:36 PM CST

A key measure of Chicago-area manufacturing activity showed an unexpected rebound in December, a trade group reported Thursday, in a surprisingly solid performance that may augur improved results for the nation's flagging industrial sector. In fact, the stronger-than-anticipated regional reading was just one of three economic reports that topped expectations Thursday. Consumer confidence showed a surprising surge, strengthening in December to its highest level since April. And existing-home sales for November were modestly better than expected, suggesting to some observers that the hard-hit housing sector might be approaching a bottom after weakening through most of the year.

Taken together, the reports hint that the nation's economy, while clearly downshifting in response to higher interest rates, is holding up better than some forecasters have been expecting. Thursday's reports "have contributed positively to the economic outlook as we close out 2006," said Action Economics economist Mike Englund, noting the latest data "put topspin on the outlooks for factories, housing, the consumer and the labor market. "Many economists had been expecting the Chicago purchasing managers index, which has weakened considerably in recent months, to be flat or even drop slightly from November's disappointing 49.9 reading.
Instead, the industrial barometer rose to 52.4. That move is significant. Under the "diffusion index" format used by the National Association of Purchasing Management-Chicago, a level above 50 indicates the sector is expanding, while a below-50 reading indicates that the manufacturing sector is contracting.

The index is based on a survey of purchasing managers in northern Illinois and northwest Indiana, one of the nation's major industrial centers. The survey looks at a number of factors such as manufacturers' spending, orders and hiring.

No comments: