The Institute for Supply Management’s Chicago division said its purchasing manager’s survey hit 55.9.
That missed expectations for 59.5 and a near 4-point decline from last month’s 59.8.
It’s the lowest reading since last August.
“On a month-to-month basis, movements in the Chicago index correctly signal shifts in the ISM about 70% of the time, so this report makes us nervous about the consensus (and our) forecast of a small increase in the ISM tomorrow to about 54 from 53.2; it would probably be more realistic now to expect a dip,” Pantheon’s Ian Shepherdson said in a note.
The employment sub-index fell sharply to a “neutral” reading of 50. The volatility seen in employment for the past four months likely reflects increased reliance on temporary workers, the report said.
Here’s the comment from MNI Indicators Chief Economist Philip Uglow:
March saw a significant weakening in activity following a five month spell of firm growth. It’s too early to tell, though, if this is the start of a sustained slowdown or just a blip.
Panellists, though, were optimistic about the future. Asked about the outlook for demand over the next three months, the majority of businesses said they expected to see a pick-up.
The grey bars show the recent tale of the tape: