News Flash

The Chicago Business Barometer (Chicago PMI) unexpectedly plunged to 47.1 in August 2026, crashing from July’s reading of 57.6. 

The reading missed Wall Street consensus forecasts of 58.0 by more than 10 points, signaling a sudden and sharp shift back into economic contraction for the region’s manufacturing sector. 

This marks the weakest reading for the index since December 2025.

📉 Key Sub-Index Decliners

• New Orders: The new orders index suffered a massive 15.4-point drop, acting as the primary drag on the headline figure.
• Production & Backlogs: The production gauge fell 8.8 points into its first notable contraction of the year, while order backlogs dropped by 12.1 points.
• Supplier Deliveries: Eased by 2.6 points, though it remains the longest-standing category still in expansion territory.

⚠️ Stagnant Price Pressures & Silver Linings

• Inflation Spikes: Despite contracting activity, Prices Paid jumped 3.8 points to their highest level since February 2022, largely driven by surging metal and raw material costs. This sticky inflation data complicates matters for the Federal Reserve. 
• Employment Boost: In a minor positive note, the employment sub-index rose 4.3 points, crossing into positive (expansionary) territory for the first time in five months.

Given the sudden contraction in Chicago manufacturing and the jump in prices paid, would you like to see how this economic data is affecting Wall Street futures this morning, or review the expected talking points for Fed Chair Kevin Warsh's upcoming speech at Jackson Hole?