Institute for Supply Management’s report revealed on Monday that
business activity in Chicago contracted
again in December and at a quicker pace
than in November.
The Chicago Business Barometer, also known as the Chicago purchasing
manager's index (PMI) came in at 36.9 in December, down from an unrevised 40.2 in the previous month. This was the 13th straight month of a contraction
in activity in the Chicago Fed region, the pace of which was also
the steepest since May (35.4).
Economists had predicted the indicator to improve to 42.5 in December.
A reading above 50 indicates an expansion of activity, while a reading
below this level points to a contraction.
According to the report, the December drop in the headline index was due
to declines in such two subcomponents as New Orders (-13.5 points) and
Production (-2.9 points). These decreases, however, were partly offset by gains
in Employment (+11.9 points), Supplier Deliveries (+9.7 points) and Order
Backlogs (+2.8 points).
The report also showed that Prices Paid declined by 5.8 points, reaching
the lowest level since July.