 | |  | | Chicago PMI Falls to 57.3, Deeper Decline than Called]
Boston, August 31 -- The Chicago PMI slipped to 57.3 in August from 64.7 in July. The decline was deeper than expected, as the median had called for a fall to just 60.0. Keep in mind, business activity in the Chicago area expanded for a 16th straight month. The average from May 2003 to July 2004 was 59.3 so the August result is only slightly behind the recent mean. Since June 2000, the correlation between Chicago PMI and the ISM index is 88%. Regression analysis suggests tomorrow's August ISM will print at 58.4 versus 62.0 in July. That would be the lowest reading on ISM since October 2003 (57.1) and should beg caution from the Fed, particularly if August payrolls turn up soft once again |  |  |  |  |
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