Chicago Business Growth Slows Substantially In January
A report released by MNI Indicators on Thursday showed a significant slowdown in the pace of growth in Chicago-area business activity in the month of January.
MNI Indicators said its Chicago business barometer plunged to 56.7 in January from a downwardly revised 63.8 in December.
While a reading above 50 still indicates growth in regional business activity, economists had expected the barometer to dip to 61.5 from the 65.4 originally reported for the previous month.
The much bigger than expected decrease by the Chicago business barometer was partly due to a drop by the new orders index, which tumbled to a two-year low.
Reflecting January’s weak order book strength, the report said the production index also fell to its lowest level in ten months.
“Firms noted an inability to absorb cost-push pressures as a reason for customers being deterred from placing orders in January,” MNI Indicators said.
Meanwhile, the report said the employment indicator was relatively unchanged from December’s three-month low but remained above the neutral-50 mark.
The prices paid index was also unchanged after five consecutive monthly decreases, with the reading indicating inflationary pressures remain elevated.
“The MNI Chicago Business Barometer had a sluggish start to 2019, pressured by significant drops in both New Orders and Production, resulting in the lowest headline reading in two years,” said Jai Lakhani, Economist at MNI Indicators.
He added, “Encouragingly, some anecdotal evidence pointed to temporary factors such as holidays as the reason for dampening output as opposed to inherent weakness in demand.
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