Economic growth in Chicago is tapering off, according to a new December Chicago Business Barometer report (link opens a PDF) released today by the Institute for Supply Management (ISM).
After clocking in at 63.0 for November, December's index registered a 59.1 reading, missing analyst expectations of 61.3.
The ISM creates its index from surveys of purchasing and supply chain professionals based in Chicago. An above-50 rating indicates expansion, while below 50 implies a contraction from the previous month. Although the geographic focus is limited to the Chicago area, investors keep tabs on the index as a leading indicator of U.S. economic activity.
According to the report, December's softening was widespread. New orders came in lower for the second straight month, and four of the five index components fell below November levels. Employment numbers took a significant dip, barely expanding at 51.6 for December.
However, longer-term trends continue to point to solid growth, with the three-month average at its highest reading since May 2011.
According to Chief Economist for MNI Indicators (an ISM partner) Philip Uglow, "The Chicago Business Barometer finally turned a corner in 2013 having been in decline for the previous two years and ended the year with fourth quarter growth at the highest for more than two years."