The Chicago purchasing managers index unexpectedly plunged to 52.6 in July from 62.6 in May.
Economists were expecting the index to climb to 63.0.
“A monthly fall of this magnitude has not been seen since October 2008 and left the Barometer at its lowest level since June 2013,” said MNI Chicago in its press release. “In spite of the sharp decline this month, feedback from purchasing managers was that they saw the downturn as a lull rather than the start of a new downward trend.”
“The surprise fall in the Chicago Business Barometer in July, following a strong second quarter, naturally raises questions about the sustainability of the recovery,” said MNI Chief Economist Philip Uglow. “Some feedback from panellists points to this being a temporary setback, although we’ll need to see the August data to judge to what extent this is a blip.”
The stock market, which was already in the red, didn’t move much on the announcement. The Dow is down 120 (0.7%) and the S&P 500 is down 17 (0.9%).