Investing.com - Manufacturing activity in the Chicago-area expanded at a much slower rate than expected in July, dampening optimism over the U.S. economic outlook, industry data showed on Thursday.
In a report, market research group Kingsbury International said its Chicago purchasing managers’ index fell by 10.0 points to a seasonally adjusted 52.6 this month from a reading of 62.6 in June. Analysts had expected the index to decline to 63.0 in July.
On the index, a reading above 50.0 indicates expansion, below indicates contraction.
A monthly fall of this magnitude has not been seen since October 2008 and left the Barometer at its lowest level since June 2013.
Commenting on the MNI Chicago Report, Philip Uglow, Chief Economist of MNI Indicators said, “The surprise fall in the Chicago Business Barometer in July, following a strong second quarter, naturally raises questions about the sustainability of the recovery.”
Following the release of the data, the U.S. dollar held on to gains against the euro, with EUR/USD shedding 0.01% to trade at 1.3395.
Meanwhile, U.S. equity markets were lower after the open. The Dow dropped 0.85%, the S&P 500 declined 0.8%, while the NASDAQ Composite slumped 0.85%.