In an unexpected development, business activity in the Chicago area contracted at a quicker pace in December, according to a report released on Monday by MNI Indicators. The Chicago business barometer, as reported by MNI Indicators, decreased to 36.9 in December from 40.2 in November. A reading below 50 signifies contraction, and economists had originally anticipated that the barometer would rise to 42.5.
This unexpected decline marks the third consecutive month of contraction, with the business barometer reaching its lowest point since May. The primary driver of this decrease was a significant drop in the new orders index, which plunged by 13.5 points to its second-lowest level since May 2020.
MNI Indicators noted that for the first time since June 2020, over half of the respondents reported a reduction in new orders. The production index also saw a decline, falling by 2.9 points to its lowest point since January 2009, excluding April-May 2020 during the pandemic period.
Conversely, the employment index experienced a notable increase, rising by 11.9 points to its highest level since November 2023. This surge was attributed to more firms maintaining stable employment and evaluating future staffing levels. Furthermore, the prices paid index decreased by 5.8 points, reaching its lowest level since July.
