The Chicago Business Barometer fell in August due to softer supplier deliveries, order backlogs and unemployment.
The barometer fell to 63.6 in August from 65.5 in July. This was ahead of expectations from economists polled by The Wall Street Journal of a reading of 63.
When the barometer is above 50, it means there is expansion. The reading takes into account five different components: new orders, order backlogs, production, supplier deliveries indicators and employment.
The prices-paid indicator was slightly lower in August though it was still considered high compared to a decade ago. Around 60% of businesses polled by MNI Indicators said they passed the higher input costs to consumers.
New orders and backlogs rose in the past while the indicator for supplier deliveries fell for the second straight month. The lull in new orders gave some businesses time to catch up on existing, unfinished orders, MNI Indicators said in a news release.
MNI Indicators also asked those surveyed about their assessment of their inventory level. Three-fifths said they thought their current stock was “about right,” while one-fifth said their inventory level was either “too high” or “too low.”
“Inflationary pressures look set to continue, potentially bleeding into consumer prices,” MNI Indicators Economist Jamie Satchi said in prepared remarks.
The Chicago report is unique because it includes firms from the bigger and better-faring service sector and isn’t conducted by a Federal Reserve Bank. The index is known to be volatile, in part because it is influenced by swings in orders for Chicago-based Boeing Co.
Write to Kimberly Chin at [email protected]