Chicago Business Barometer Unexpectedly Indicates Faster Contraction In May
Chicago-area business activity took a surprising turn in May, showing a faster rate of contraction than expected. According to a report released by MNI Indicators on Friday, the Chicago business barometer fell to 35.4 in May from 37.9 in April, marking a significant decline. This drop, with a reading below 50 indicating contraction, was not foreseen by economists who had anticipated an increase to 41.0.
The latest data reveals that the Chicago business barometer is now at its lowest level since May 2020. This unexpected decrease was driven in part by a sharp decline in the new orders index, which fell by 9.2 points to its lowest level since May 2020. Additionally, the order backlogs index and the employment index both experienced notable drops to their lowest levels since May 2020 and June 2020, respectively.
On a more positive note, the production index saw a significant increase of 8.1 points in May, marking a turnaround after five consecutive months of decline and reaching its highest level since January. Despite this, the prices paid index slightly decreased by 0.9 points, remaining at the second-highest level since August 2023.
The unexpected contraction in the Chicago business barometer serves as a reminder of the ongoing challenges faced by businesses in the region. Stay informed with real-time updates from the RTTNews Economic Calendar, providing valuable insights for traders and businesses alike.
