Chicago PMI drops to lowest level in six months in October

Economic activity in the Chicago area deteriorated a little more than expected in October, according to figures released on Wednesday.

The MNI Chicago business barometer fell to 58.4 from 60.4 in September, missing expectations for a smaller drop to 60.0 and marking the lowest reading since April. Still, it was well above the 50 mark that separates contraction from expansion.

MNI said the drop was due to a fall in order book growth and unfinished orders, which offset a rise in output, delivery times and employment.

On the year, the barometer was down 10.7%, the biggest year-over-year fall since December 2015.

Jamie Satchi, economist at MNI Indicators, said: "The MNI Chicago Business Barometer continued to revert back towards trend-levels in October, cooling off after a hot and unsustainable run last year. Production continues to be restrained by issues between firms and their suppliers, reflected by supplier deliveries at a 14-year high, while the latest raft of tariffs on Chinese goods appears to be exacerbating uncertainty across firms."