Chicago Business Barometer Falls More Than Expected In November

(RTTNews) - Chicago-area business activity grew at a notably slower rate in the month of November, according to a report released by MNI Indicators on Wednesday.

MNI Indicators said its Chicago business barometer fell to 60.8 in November from a one-year high of 66.2 in October.

While a reading above 50 indicates continued growth, economists had expected the barometer to show a more modest decrease to a reading of 63.2.

The pullback by the business barometer was partly due to a significant slowdown in the pace of growth in new orders, as the new orders index tumbled to 61.9 in November after jumping to 73.6 in October.

The production index also dropped to 66.7 in November from 68.4 in October, while the employment index slid to 54.4 from 60.2.

Philip Uglow, Chief Economist of MNI Indicators said, "Following the sharp rise in the Barometer to a one year high in October it wasn't too surprising to see activity ease somewhat in November. Overall the trend remains firm and activity looks set to pick up in Q4 from Q3."

Last Thursday, the Federal Reserve Bank of Philadelphia released a report showing that its index of manufacturing activity jumped to its highest level in over twenty years in November.

The Philly Fed said its diffusion index for current activity surged up to 40.8 in November from 20.7 in October, with a positive reading indicating growth in regional manufacturing activity.

The substantial increase came as a shock to most economists, as the consensus estimate called for the index to drop to a reading of 18.0.

With the unexpected increase, the Philly Fed Index reached its highest level since hitting 41.2 in December of 1993.

Meanwhile, the New York Fed released a separate report last Monday showing a rebound by its index of regional manufacturing activity.

The New York Fed said its general business conditions index climbed to 10.2 in November from 6.2 in October. Economists had expected the index to rise to a reading of 11.0.