Chicago PMI - 9:45

Highlights * The Chicago PMI index jumped over the 50 point threshold for the first time since September 2008 as the index grew to 54.2 in October. The consensus expected the index to increase slightly to 49.0 from 46.1 and remain in the contraction phase. * The production index increased to 63.9 from 47.2 and orders rose to 61.4 from 46.3. * Inventories continued to contract and have gotten worse over the last month as the index declined to 32.2 from 38.9. * The only other sector that continued to contract was employment, which declined to 38.3 from 38.8. * Other components of the index showed the manufacturing sector strengthening including order backlogs, which increased to 41.9 from 36.7 and prices paid, which declined to 48.6 from 51.3. Key Factors * The entire index showed signs of a sustainable expansionary cycle. * Unlike last month's national index, where production grew on the anticipation of new orders that never came in, production and new orders posted strong growth and entered an expansionary phase in the Chicago region. Big Picture * The Chicago PMI has little overall economic value, and is only watched by the financial markets because it is usually released one day in advance of the similar national ISM manufacturing survey. A significant move in this regional survey will therefore sometimes be seen as having predictive value for the ISM index.