In August, the Chicago PMI surprised on the upside of expectations rising from 43.4 to 50.0, while an outcome of 48.0 was expected. Also the details are encouraging as production (52.9 from 43.3), new orders (52.5 from 48.0) and supplier deliveries (54.6 from 49.6) rose back into expansionary territory in August. Order backlogs (45.8 from 32.1), inventories (27.5 from 25.4) and employment (38.7 from 35.3) are still contracting, but improved in August. The improvement might be supported by the resumption of production at General Motors and Chrysler due to the government’s “cash-for-clunkers” plan.
EMU: CPI inflation hit the trough in July
According to the flash estimate, euro zone CPI inflation rose from -0.7% Y/Y to - 0.2% Y/Y, while the consensus was looking for a figure of -0.3% Y/Y. The higher than expected outcome is however no surprise after the German and other national inflation data surprised on the upside. In the coming months, inflation is expected to return into positive territory, partially due to the unwinding in oil price base effects.
