Chicago-area business activity was nearly flat in the month of January, according to a report released by MNI Indicators on Tuesday.
MNI Indicators said its Chicago business barometer dropped to 50.3 in January from a revised 53.9 in December, hitting its lowest level since last May.
While a reading above 50 indicates continued growth in Chicago-area business activity, economists had expected the barometer to climb to 55.3.
"Business activity in the New Year got off to a slow start with contracting orders and easing production weighing heavily on hiring intentions," said Shaily Mittal, senior economist at MNI Indicators.
She added, "Activity in Q1 is usually weaker due to seasonal factors, so the following surveys will provide a better picture of business performance."
The unexpected drop by the business barometer was driven by a downturn in new orders, as the new orders index fell by 7.8 points to 49.1.
The report also showed a slowdown in the pace of production growth, with the production index dipping by 2.3 points to 56.0.
With lower orders and output, MNI Indicators said demand for labor fell. The employment index remained below the break-even level for the third straight month.
Meanwhile, the report said inflationary pressures at the factory gate increased for the second consecutive month, with the prices paid index rising to 61.4 in January.
by RTT Staff Writer
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