Employment Collapsed In Today’s Chicago PMI Report, But It’s A Mistake To Freak Out About It

• Tweet
• Pin It

Earlier this morning, we learned that the Chicago PMI climbed to 51.6 in December.  This was slightly ahead of economists expectations.

The gain was largely driven by a jump in the new orders sub-index.

However, the employment index collapsed to a three-year low.

Should we be worried?

TD Securities’ Eric Green thinks we should take a deep breath and think about what happened.

“That may look worse than it really is, however,” he writes. “The drop in employment reflects the prior weakness in new orders in November and to a lesser degree owing to the fiscal cliff which breeds well understood uncertainty.”

Indeed, the exact opposite of what happened in this month’s employment index could happen in an upcoming month.

“With the bounce back in new orders, employment will also bounce back, and ultimately everything flows from new orders which is now comfortably back above its 6m average of 50.8,” writes Green. “Fade the weakness in employment and treat the release in much the same way as the headline would suggest which is better, not worse.”

SEE ALSO: 44 Companies That Get Slammed If The Government Slashes Spending >

Please follow Money Game on Twitter and Facebook.

Join the conversation about this story »

Clusterstock

Related Posts

• 10 Cool Ass Facts About “The Hangover 3″ Like Alan Finally Got BET
  10 Cool Ass Facts About “The Hangover 3″ Like Alan Finally Got BET
• Angelina Jolie Speaks Out About Her Double Mastectomy Reveal (DETAILS)
  Angelina Jolie Speaks Out About Her Double Mastectomy Reveal (DETAILS)
• 16 Things You Need To Know About Kidnapper Ariel Castro’s Brothers That Proves Their Innocence (LIST)
  16 Things You Need To Know About Kidnapper Ariel Castro’s Brothers That Proves Their Innocence (LIST)
• Everybody Hates Chris: Spray Can Breezy Twitter Rants About Neighbor’s Complaints Of The Graffiti Art Painted Outside Of His House
  Everybody Hates Chris: Spray Can Breezy Twitter Rants About Neighbor’s Complaints Of The Graffiti Art Painted Outside Of His House