DEFINITION of 'National Association of Purchasing Management Chicago - NAPM Chicago'

An association which compiles a survey and index that monitors business conditions in Chicago and its surrounding areas. The National Association of Purchasing Management Chicago (NAPM Chicago) surveys firms in both the manufacturing and non-manufacturing sectors, and provides a reading above or below 50%. Readings above 50% indicate expanding business conditions, while a reading below 50% indicates contracting conditions.

BREAKING DOWN 'National Association of Purchasing Management Chicago - NAPM Chicago'

As with most other indicators that give readers a feel for current economic trends, the NAPM Chicago is useful to understand the overall direction of the economy. Equity markets would enjoy to see this indicator rise, as business expansion should lead to higher corporate profits, and thus rising stock prices. The bond markets would enjoy to see more moderate growth as to stem inflationary pressures that would hurt bond prices due to the erosion of purchasing power of the principle and coupon payments.

Because it is thought that the NAPM Chicago surveys the manufacturing sector primarily, it is thought to be a leading indicator of the ISM manufacturing index.

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