Analysts at Nomura noted that the Chicago PMI improved only 0.2 index points to 57.6, below expectations (Nomura: 59.0, Consensus: 58.0), indicating continued business sector growth but at a slower pace.
“April’s reading was 10.2 points below the December 2017 high of 67.8. The underlying subindices were mixed. Production growth picked up somewhat while new orders moderated. In addition, the employment index declined 7.3p to 52.1, its lowest reading since October 2017.”
“On one hand, the moderation in ISMrelated sub-components in today’s report poses some downside risk for tomorrow’s ISM manufacturing release, where we expect a small decline.”
“However, most of the Chicago PMI subindices are coming off of highs that were likely unsustainable and, despite recent declines, continue to point towards steady growth. With respect to recently enacted steel and aluminum tariffs, the survey noted only a third of respondents expected a “major impact” for their business while just over half expected no significant impact.”
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