Chicago PMI declines more than expected

Economic activity in the Chicago area deteriorated more than expected in August.

The Chicago Purchasing Managers’ index fell to 51.5 from 55.8 in July, led by a large setback in order backlogs and a deceleration in new orders. Economists had been expecting a smaller decline to 54.0.

Order backlogs fell 14.5 points to 41.7, moving back intro contraction territory to the lowest level since April.

Lorena Castellanos, senior economist at MNI Indicators, said: “Economic activity slowed down into the summer, suggesting June’s momentum was only a temporary revival in activity.

“Overall, it wasn’t a rosy month, with Employment the only measure that gained traction. On a trend basis, though, the July-August growth rates paint a slightly better picture – albeit still weak – than that seen earlier in the year.”