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US TSYS SUMMARY

What a Short, Strange Trip It's Been

GLOBAL POLITICAL RISK

Pfizer, Moderna Jabs Retain High Trust; AZ, Sputnik Lower

--Chicago Business Barometer Rises to Fresh Six-and-a-Half-Year High
--Barometer 65.9 Q4 Vs 61.0; Highest Since Q1 2011
--Production, New Orders Hit Multi-Year Highs
--Inventories Highest Since September 2014
     LONDON (MNI) - The MNI Chicago Business Barometer rose to 67.6 in December,
up from 63.9 in November, closing the year at the highest level since March
2011.
     On a calendar quarter basis, the Barometer rose to 65.9 in Q4 from 61.0 in
Q3, the best quarterly performance since Q1 2011, only the third time in the
last decade there have been three consecutive above-60 readings for the Oct-Dec
period.
     Both output and demand showed strong gains in December, with each rising to
multi-year highs. The Production indicator rose to a level last seen higher 34
years ago, while the New Orders Indicator hit a three-and-a-half year high. As
for the other three indicators that comprise the Barometer, Order Backlogs also
grew, but Employment and Supplier Deliveries lost ground on the month.
     Firms' unfulfilled orders edged slightly higher in December, but remained
below the levels recorded in October, when businesses grappled with the worst of
the recent, challenging weather conditions. Also reflecting the better
logistical environment, supplier delivery times shortened in December. The
associated indicator fell to the lowest level since April but remained
comfortably above the 50-neutral mark.
     Companies did, however, keep increased quantities of stock at hand. After
hitting an eight-month high in November, the Inventories indicator rose to fresh
3-year high in December. There was evidence of firms carrying a larger level of
stock to support stretched lead times and in preparation for product launches
scheduled for the New Year.
     Despite decreasing in December, the Employment indicator remained in
expansionary territory. On a 12-month average basis, 2017 was the best year the
indicator has had since 2014, slipping below the neutral-50 mark on only four
occasions.
     This month's special question asked firms to predict how both their
businesses and the US economy would fare in the upcoming new year. Just over 50%
saw their company growing somewhere between 0-5%, with 37% forecasting growth
between 5-10% and the remaining 12% expecting growth above 10%. Regarding the
bigger picture, 61% of firms thought the US economy would grow somewhere in the
region of 2 to 5% over 2018, while 29% put growth at between 0 and 2%. Just
under 6% of businesses saw the US economy contracting in 2018 while the
remaining 4% saw economic growth running above 5%.
     Inflationary pressures at the factory gate remained high in December,
though did edge down to the lowest level since August. The upswing in global
demand, along with input shortages induced by this year's hurricanes, saw prices
elevated throughout the year.
     "Sentiment among businesses started 2017 in good shape and impressed more
as the year progressed. December's result secured the MNI Chicago Business
Barometer's first full year of expansion since 2014 and with New Orders ending
the quarter in fine shape there is every chance this form could be carried over
into 2018," said Jamie Satchi, Economist at MNI Indicators.
     The survey period ran from December 1 to December 19.
--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com
--MNI London Bureau; +44 203-586-2226; email: jamie.satchithanantham@marketnews.com
[TOPICS: MAUDS$,M$U$$$,MT$$$$,MX$$$$]
MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com