Chicago PMI hits two-year low in January

A closely-followed index of manufacturing conditions in the Chicago area hit a two-year low in March.

Market News International's Chicago manufacturing sector index dropped by six points from the month before to hit 58.7, practically erasing the previous month's surge.

Economists had penciled in a smaller decline to 61.9.

The sub-index tracking order backlogs saw the biggest deterioration and was left pointing to an outright contraction, for the first time since January 2017, MNI said.

In parallel, a sub-index tracking the prices paid by companies sported its biggest drop since August 2017.

"Although the barometer has comfortably remained above the 50- neutral level for more than two years now, survey evidence points to a slight slowdown since last year,” said Shaily Mittal, Senior Economist at MNI.

"The Fed’s break from monetary tightening amid global uncertainty and softer inflation is seen underpinning optimism in the business environment."