A key economic indicator called the U.S. Chicago Purchasing Managers Index has some very bad news about the economy, and, perhaps worse, the indicator has been right at predicting recessions 100 percent of the time for decades.
The CPMI assesses the business conditions and economic health of the manufacturing sector in the upper Midwest around the Chicago region and maintains that the economy is healthy if the index sits at 50.0 or above. But under 50.0 reveals a contracting manufacturing and business climate in the important region.
David Rosenberg, the founder and president of the market analysis firm Rosenberg Research & Associates Inc., has scanned the Chicago PMI and come to the disheartening realization that the index numbers are showing that we are in a recession.
As Rosenberg noted, this index has been 100 percent correct about predicting recessions for a very long time.
Chicago PMI at 35.4 has been consistent with recession 100% of the time in the past. Those who threw in the towel on the call will be picking it up before too long, as they did in 1990, 2001 and 2008. pic.twitter.com/GDnES8siGL
— David Rosenberg (@EconguyRosie) May 31, 2024
Nautilus Research added a chart that showed the times that the CPMI was at or below 35.4 and that every time it fell in a recession as far back as the 1960s.
