Chicago PMI inches higher in April

Getty ImagesThe Chicago PMI usually tracks the path of orders for Boeing aircraft with a lag of a few months, says Ian Shepherson, chief economist at Pantheon Macroeconomics. The airline manufacturer is based in Chicago.

The numbers: Chicago PMI inched up in April to a reading of 57.6. The increase only slightly retraced the big drop in March, when the index fell to 57.4 from 61.9 in February. Economists had expected a bigger rebound, and had penciled-in a reading of 59.3 in April.

What happened: Any reading over 50 indicates improving conditions, so the report still indicates healthy activity, just down from the super-strong readings seen last fall and early this year. New-orders growth hit a 15-month low.

RT @ tEconomics "#UnitedStates Chicago PMI at 57.6https://t.co/dRlDgAbmsg pic.twitter.com/GovPesUPsu"

The big picture: Economists use the regional factory surveys to gauge the national ISM factory index to be released Tuesday. These surveys have been "all over the lot so far in April," said Lou Crandall, chief economist at Wrightson ICAP. The national ISM index had also been red-hot but slipped in March to a reading of 59.3. Economists are forecasting another slight pullback to 58.6 in April.

What are they saying?: "The score for the regional surveys is 4 to 1 in favor of a weaker activity, suggesting a modest decline of about 4% to 57% is possible for the IMS manufacturing," said T.J. Connelly, head of research at Contingent Macro Advisors.

Market reaction: The Dow Jones Industrial Average DJIA, -0.27% opened higher on Monday after a series of mergers were announced and traders appeared to look past the data.