Markets have closely followed the Chicago Business Barometer since 1967 due to its ability to capture well US business cycles and predict where GDP is heading. It has flagged recessions and booms well in advance and this remains the case today.

1. Insight and data for better decisions
Focus On: US GDP and Chicago Business Barometer
Want to Know Where US GDP is Heading?
Markets have closely followed the Chicago Business
Barometer since 1967 due to its ability to capture
well US business cycles and predict where GDP is
heading. It has flagged recessions and booms well
in advance and this remains the case today.
October 2004 and February 2011 respectively,
indicating a significant pick-up in demand. Both
indicators have remained around 60 since then,
showing business activity has continued to expand
firmly, though, at a slower pace.
The Chicago Business Barometer has been gradually
trending higher since the start of the year, with the
recovery gathering pace in the second half when the
Barometer rose sharply to 63.3 in the fourth quarter
from 54.4 in the third quarter. US GDP data showed
it was the strongest second half growth for 10 years
and GDP rose 2.7% in the fourth quarter compared
with the same period a year earlier, up from 2% in
the third quarter.
Another core topic in the Chicago Report in 2013
was the evolution of its Inventories Indicator. The
Chicago survey suggested companies were
rebuilding inventories from August to November.
Subsequent GDP data showed that inventories
added 1.67 percentage points to annualised growth
of 4.1% seen in the third quarter, and 0.42 to
growth of 3.2% seen in the fourth quarter.
In October, four months ahead of the publication of
the GDP advance estimates, the New Orders and
Production components of the Chicago Business
Barometer expanded at their fastest pace since
The Chicago Business Barometer and other
indicators in the Chicago Report are essential tools
for anyone monitoring the US economy, signalling
downturns and upturns well before they happen.
The graph speaks for itself.
US GDP and Chicago Business Barometer
90
9
80
7
70
5
60
3
Chicago Business Barometer
GDP % y/y (RHS)*
*Source: Bureau of Economic Analysis
Q4-2013
Q4-2011
Q4-2009
Q4-2007
Q4-2005
Q4-2003
Q4-2001
Q4-1999
Q4-1997
Q4-1995
Q4-1993
Q4-1991
Q4-1989
Q4-1987
Q4-1985
Q4-1983
Q4-1981
Q4-1979
Q4-1977
-5
Q4-1975
20
Q4-1973
-3
Q4-1971
-1
30
Q4-1969
1
40
Q4-1967
50

2. 2
MNI Indicators - Focus On - July 2013
MNI Indicators
Insight and data for better decisions
Editorial Content:
Philip Uglow, Chief Economist
Lorena Castellanos, Economist
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