Manufacturing Slows in Chicago During December as Consumer Confidence Falls

​Initial claims for unemployment benefits fell by a marginal amount last week, continuing a downward trend towards the 49-year low set in September. Chicago’s manufacturing activity slowed last month, although only slightly, due to slip-ups in new orders, employment and supplier deliveries indices. The Conference Board’s December consumer confidence index revealed a sharply lower measure from November, as market volatility and lower economic growth expectations alarm consumers.

• According to the Labor Department, jobless claims fell by 1,000 to 216,000 during the week ending December 22. In three of the last four weeks, initial claims for unemployment benefits have declined, now floating just above the 49-year low of 202,000 met in September. The recent trend signals improvement in labor market conditions from the end of November, when claims were near 235,000. Further showing improvement, the four-week average of initial claims fell by 4,750 claims.

• Manufacturing activity in the Chicagoland area has slowed through the last month, according to the Institute of Supply Management’s Chicago purchasing managers’ index. The December index fell one point from the November index to 65.4, beating some analyst expectations of 62.0. Three of the five factors making up the index fell: new orders, employment and supplier deliveries. An equal share of 46.8% of participating managers believed their business activity would expand by less than 5% or by a rate between 5-10%. Marking the 34th consecutive report with a reading over 50.0, December’s index signals a continually healthy manufacturing environment in Chicago.

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• The Conference Board’s consumer confidence index fell sharply during December, declining 8.3 points to 128.1. Just two months prior, in October, the index was at an 18-year high of 137.9. Much of consumers’ concern likely stems from heightened market volatility and weaker expectations for global growth in 2019. However, confidence is still at relatively high levels by historical standards. Also, while some December indicators showed market conditions and job prospects weakening last month, a lot of signals point toward economic expansion in the short run, according to the Conference Board’s director of economic indicators, Lynn Franco.