Chicago PMI Unexpectedly Plunges To 2-Year Lows

Against expectations of a modest decline, the Chicago PMI for July tumbled from 56.0 to 52.1 (well below the 55.0 expected) – the worst in 2 years…

Source: Bloomberg

Under the hood, only 2 components rose from last month:

Prices paid rose at a faster pace; signaling expansion

New orders fell at a faster pace; signaling contraction

Employment rose at a faster pace; signaling expansion

Inventories fell and the direction reversed; signaling contraction

Supplier deliveries rose at a slower pace; signaling expansion

Production fell and the direction reversed; signaling contraction

Order backlogs fell and the direction reversed; signaling contraction

That has a very stagflationary stench to it.