Growth in Chicago-area business activity slowed by much more than expected in the month of July, according to a report released by MNI Indicators on Friday.
MNI Indicators said its Chicago business barometer slid to 52.1 in July from 56.0 in June. While a reading above 50 still indicates growth, economists had expected the barometer to show a more modest dip to 55.0.
With the bigger than expected decrease, the Chicago business barometer fell to its lowest level since August 2020.
The drop by the headline index came as the production and the new orders indexes both dropped to two-year lows. The production index tumbled to 48.2 in July from 55.2 in June, while the new orders index slumped to 44.5 from 49.9.
MNI Indicators noted the order backlogs index also fell to 48.4 in July from 55.2 in June, as a quarter of businesses saw backlogs decline as they worked through postponed production amid softened new order levels.
Meanwhile, the report showed the employment index climbed to a current-year high of 56.1 in July from 50.7 in June as the labor market continued to tighten.
The prices paid index also rose to 81.9 in July from 79.6 in June, with MNI Indicators noting transparency issues regarding grounds for supplier price increases were flagged.
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