Chicago area factory activity drops by more than expected in February

A gauge of factory activity in the Chicago area retreated last month for the first time since November.

Market News International's Chicago Business Barometer declined by 8.9 points from January to reach 56.3 (Barclays Research: 62.5).

The key sub-index linked to new orders slumped by 12.3 points to 53.0, while that tracking companies' output levels fell for a second month in a row to 55.4.

Another sub-index linked to supplier deliveries fell by 12.3 points to 75.3, but companies reported that their suppliers were still struggling to keep up with demand and higher prices.

The sub-index for employment meanwhile weakened by 5.6 points to 43.5.

Roughly half of respondents predicted that employment costs would rise by 4-0-6.0% in 2022 with a further 28.05 anticipating an increase of 7-0-10.0%.