Business activity in Chicago decelerated in October after a pickup in September, according to the Institute of Supply Management and MNI Indicators.
The latest reading for Chicago purchasing manager’s index (PMI) came in at 50.6, a five-month low.
That’s a lower reading than the 54.0 economists had forecast, and well below the prior month’s 54.2.
Still, a reading above 50 indicates that business activity is still in expansionary territory.
The report noted that the decline was led by a slowdown in production, which fell 5.4 points but remained above the 2016 average, and new orders, which dipped to their lowest level since May.
On the flip side, employment ticked up slightly, climbing above 50.
“A key takeaway from the latest survey was the pick-up in Prices Paid to a nearly two-year high. 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. Hopefully, it doesn’t mark the start of a downward trend,” she added.