Chicago PMI Inches Higher But Unemployment Drops Sharply

Chicago PMI released earlier today and the overall index inched higher from 61.5 in January to 62.6 in February (the consensus however called for a decline to 59.7). The report is surprisingly strong on all fronts except employment - Employment sharply declined from 59.8 to 53.0, though any reading above 50 still represents growth. The sharp increase in weekly unemployment claims this month along with this weak employment report doesn't bode well for the BLS reported unemployment rate due next week.

On the bright side, the rate of growth in production and new orders declined slightly in February, and the indices both remained above 60 at 65.2 and 62.2, respectively. Even if growth continues to slow at its current pace, it would take at least 6 months before production and new orders turn negative.