Today the Chicago Purchasing Management Association announced that its index of regional manufacturing activity continued to decline during February. The Index level for February was 44.9. This compares with readings of 50.9 in January and 54.8 in December. An index reading above 50 indicates growth in manufacturing activity, and readings less than 50 indicate a slowing in such activity.

The Index represents the combination of several sub-indexes that characterize specific facets of the manufacturing process. In February, in the Chicago area, most of these sub-indexes declined. The production index fell from 57.0 to 45.5, the lowest reading since 1991 when the economy was emerging from a recession. The prices-paid index - an indicator of inflation - declined from 53.8 to 49.1, the first reading below 50 since 1991. Other indexes declining during February were: new orders, inventories, employment, and deliveries.

Tomorrow the National Association of Purchasing Management (NAPM) is scheduled to release the results of its nationwide survey for February. We'll see then how the Chicago and National results compare. Last month the National Purchasing Managers' Index was an anemic 44.2, the lowest reading since the 1990-91 recession.

Also today, the Conference Board announced that its Help-Wanted Advertising Index was virtually unchanged from December to January. The Index is based on a monthly survey of employment want ads in 51 major newspapers all over the country. From November to December the Index jumped from 82 to 88 with 86% of labor markets reporting an increase in want ad volume. From December to January the Index slipped back to 87. So, the volume of ads was about the same in January as in December. Consistent with this, only 27% of the markets showed a month-to-month increase in ad volume.

The only news release from the Government today was the Labor Department's weekly report on new claims for unemployment insurance benefits. Today's report showed that 359,000 claims were filed during the week ending February 24, down 23,000 from the revised figure for the week before.

To smooth out the effects of short-term fluctuations in the weekly numbers, the Labor Department calculates and publishes a four-week moving average of first-time unemployment claims. This is obtained by adding up the weekly values for the past four weeks and dividing by four. The latest value of the four-week moving average is 372,250. This is down from last week's 383,000 reading, but, is still 10.95 percent higher than a year ago. Both the four-week moving average and the year-over-year change in that average have been trending upward for the past year.

Byline: Lafferty (MF Merlin)