The Chicago Purchasing Managers Index jumped from 50.8 in July to 57.9 in August, much better than the estimate of 50.0. A reading above 50 suggests Midwest manufacturing is expanding. New orders increased from 53.5 to 60.2, employment fell from 45.9 to 39.2 while prices paid, eased from 90.7 to 80.6 as raw material prices begin to ease.
Personal income fell 0.7% in July, worse than the forecast of a 0.2% decline. Personal spending increased 0.2% and matched forecasts. However, the PCE Price Index increased 0.6% in July, so real spending, which discounts changes in prices, actually fell 0.4%.
Final University of Michigan consumer sentiment for August rose from 61.7 in the preliminary figure to 63.0, exceeding the forecast of 62.0. The recent drop in gasoline prices is aiding consumer sentiment; however, problems in the housing market and growing worries about the economy continue to depress the overall mood of the consumer.
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