The collective sentiment of purchasing managers can predict an economic recession months before it happens
By surveying the people who manage corporate supply chains, economists can gauge the health of the manufacturing sector and predict national economic shifts months before official government data is released.
The Chicago PMI, or Business Barometer, uses the collective sentiment of purchasing managers to forecast economic momentum. Since 1947, this diffusion index has tracked five key areas including new orders, production, and employment. Because purchasing managers are the first to see shifts in demand and supply chain delays, their insights provide a leading indicator that often precedes national data by two months.
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