Suggesting a loss of momentum to start the fourth quarter, MNI Indicators released a report on Monday showing an unexpected drop by its reading on Chicago-area business activity in the month of October.
MNI Indicators said its Chicago business barometer dropped to 50.6 in October from 54.2 in September, although a reading above 50 does indicate growth. Economists had expected the index to inch up to 54.3.
The unexpected drop by the business barometer was partly due to a subtraction by the new orders index, which fell to its lowest level since May.
While the order backlogs index increased slightly, it remained in contraction territory for the third consecutive month.
MNI Indicators said the employment saw a smaller rise but edged back above 50, recovering some of the lost ground experienced in the previous month.
The report also showed a pick-up in inflationary pressures at the factory-gate, as the prices paid index rose to its highest level since November of 2014.
"Inflationary pressures are on the rise, which is one of the metrics the Federal Reserve has been waiting for to increase rates," said Lorena Castellanos, senior economist at MNI Indicators
"However, economic growth ahead, as read by the October Chicago Business Barometer, looks very disappointing," she added. "Hopefully, it doesn't mark the start of a downward trend."
by RTT Staff Writer
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