Chicago Business Activity Increases At Slower Rate In December

(RTTNews) - Chicago-area business activity saw a bigger than expected slowdown in the pace of growth in the month of December, according to a report released by MNI Indicators on Tuesday.

The report showed that the Chicago business barometer dropped to 59.1 in December from 63.0 in November. A reading above 50 indicates an increase in activity, but economists had expected a more modest decrease to a reading of 61.3.

MNI Indicators said the moderation in December was led by a second consecutive monthly decrease by the new orders index, which dropped to 60.7 in December from 68.8 in November.

The readings on production and order backlogs also decreased compared to the previous month but continued to indicate growth.

The report also showed that the employment index tumbled to 51.6 in December from 60.9 in November, hitting its lowest level since April. The prices paid index also edged down to 63.3 from 63.7.

On the other hand, the supplier deliveries index climbed to 60.7 in December from 56.2 in November, reaching its highest level since June of 2011.

Philip Uglow, Chief Economist at MNI Indicators said, "The Chicago Business Barometer finally turned a corner in 2013 having been in decline for the previous two years and ended the year with fourth quarter growth at the highest for more than two years."

"While activity dipped a little in December, businesses continued to report firm growth in Production and New Orders," he added.

Thursday morning, the Institute for Supply Management is scheduled to release its report on national manufacturing activity in the month of December.

Economists expected the ISM's index of manufacturing activity to edge down to 57.0 in December from 57.3 in November, indicating a slight slowdown in the pace of growth.