Chicago Business Barometer Unexpectedly Drops In August

(RTTNews) - Business activity in the Chicago area unexpectedly grew at a slower rate in the month of August, according to a report released by MNI Indicators on Monday.

MNI Indicators said its Chicago business barometer dipped to 54.4 in August from 54.7 in July. While a reading above 50 indicates growth, economists had expected the index to inch up to 54.9.

The modest drop by the business barometer reflected slight decreases by the production and new orders indexes, with both paring some of the large gains seen last month.

The report said the order backlogs index also fell slightly, remaining below 50 for the seventh consecutive month

Meanwhile, the employment index rose during the month, underpinned by July's surge in output and orders. The index still remained in contraction for the fourth straight month.

Chief Economist of MNI Indicators Philip Uglow said, "It was pretty much steady as she goes in August with orders and output just about holding on to July's gains."

"While the slowdown earlier in the year looks temporary, we're still some way below the strong growth rates seen towards the end of 2014," he added.

On the inflation front, MNI Indicators said its prices paid index fell sharply into contraction in August as oil and other commodity prices plunged.