Nice move higher in this highly volatile series. Employment however, moved lower as it has in most surveys:
Volatility is the name of the game when it comes to the Chicago PMI which surged in June to a 56.8 level that is far beyond expectations and follows a sub-50 contractionary reading of 49.3 in the May report. And there was no indication in the May report of the strength to come as both new orders and backlog orders were in outright contraction. But that was for May! For June, new orders are suddenly at their best level since October 2014 while backlog orders are rising at their fastest pace since May 2011. Production is now at its best level since January this year while inventories, in what may be a sign of intentional restocking given the strength in orders, are rising sharply from a 6-1/2 year low. A negative in the report is employment which is at its lowest reading of the recovery, since November 2009. Yet should the strength in orders extend to a second month, employment is bound to get a boost. This report covers both the manufacturing and non-manufacturing sectors of the Chicago economy.
April’s gain more than reversed with this decline in May as the downtrend looks to have dipped into stall speed:
And, as previously discussed, looks to me like Brexit’s influence in financial markets is collapsing and the whole thing will soon be all but forgotten.