WASHINGTON (dpa-AFX) - MNI Indicators released a report on Wednesday unexpectedly showing a continued contraction in Chicago-area business activity in the month of July.
The report said the Chicago business barometer tumbled to 44.4 in July from 49.7 in June, with a reading below 50 indicating a contraction in regional business activity.
The continued decrease came as a surprise to economists, who had expected the business barometer to edge back above 50 to 50.6.
MNI Indicators said four of the five business barometer components were in contraction territory in July, with only the supplier deliveries index above 50.
The production index plunged by 22 percent to a ten-year low, while the new orders index also subsided further into contraction.
The report also said the employment index fell into contraction for the first time since October of 2017, as weaker demand and production led firms to adjust their workforce.
'Global risks, trade tensions, slowdown in demand and sombre growth expectations, all jeopardize business conditions,' said Shaily Mittal, Senior Economist at MNI.
'Firms are not panicking yet, but the latest report isn't adding to the cheer,' she added. 'The above risks lend weight to a monetary easing approach by the Fed, albeit a gradual one.'
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