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Chicago Economic Activity Cools in June to Near Two-Year Low — MNI Indicators

By Xavier Fontdegloria

 

Business activity in the Chicago area slowed in June, growing at its lowest pace in almost two years, according to data from a survey compiled by MNI Indicators released Thursday.

The Chicago Business Barometer fell to 56.0 in June from 60.3 in May, the lowest reading since August 2020 and below the 58.0 consensus forecast from economists polled by The Wall Street Journal. Readings above 50 signal expansion of activity, while below 50 indicate contraction.

The barometer is compiled after surveying firms in the Chicago area to assess business conditions. The index takes into account five components: new orders, order backlogs, production, supplier deliveries and employment.

The barometer follows the trend of other U.S. regional surveys for the manufacturing sector, which showed activity slowing or declining in June.

Four of the five components decreased in June compared with May, with employment the exception, MNI Indicators said.

The new orders index registered the largest decrease, dropping 9.8 points to 49.9, the lowest in two years. A quarter of firms reported fewer new orders over the month.

The production also fell as respondents reported waning demand and slowing production. Order backlogs also registered a marked decrease, the report said.

The supplier deliveries index fell 0.2 points to 69.1, the lowest level since November 2020. Deliveries remained slow and lead times lengthened, but there were reports that some materials became substantially more available due to lower demand.

The employment index increased to 50.7, the highest since November 2021, in a sign that firms in the area saw relatively stable employment conditions for the month.

Inflation pressures eased somewhat, according to the survey. The prices paid index eased to the lowest reading since February 2021, with 13% fewer firms reporting higher prices in June compared with May.

 

Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com

 

(END) Dow Jones Newswires

June 30, 2022 10:15 ET (14:15 GMT)

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