Reflecting moderations in both output and new orders growth as well as weaker hiring sentiment, MNI Indicators released a report on Friday showing a bigger than expected slowdown in the pace of growth in Chicago-area business activity in the month of September.
MNI Indicators said its Chicago business barometer fell to 60.4 in September from 63.6 in August, although a reading above 50 still indicates growth. Economists had expected the barometer to edge down to 62.5.
The report said growth in production and new orders remained solid, although the production index dropped to a six-month low and the new orders index slid to a five-month low.
“Anecdotal evidence continued to report some firms outperforming their own forecasts, but others noted a slowdown in output and weaker demand,” MNI Indicators said.
The report also said hiring activity eased again in September, with firms still appearing open to adding to their workforce but having difficulty identifying adequate workers.
On the inflation front, the prices paid index dipped in September, but MNI Indicators noted tariffs continue to push prices higher along with material shortages.
The order backlogs index rose in September, as healthy levels of demand have left firms unable to complete orders, exacerbated by component allocation issues and employment shortages.