CHICAGO, Jan. 31 (Xinhua) -- The Chicago Purchasing Managers Index (PMI), also known as Chicago Business Barometer, fell sharply in January as new orders dropped to two-year low.
The index dropped to 56.7 in January, down 7.1 points from December's downwardly adjusted 63.8, according to a statement released Thursday by the Institute for Supply Management Chicago.
The barometer is considered to be a leading indicator of the U.S. economy. It is made up of production, new orders, order backlogs, employment and supplier deliveries indicators and is designed to predict future changes in U.S. gross domestic product.
Four out of the five barometer sub-components started the year lower. Notable falls in production and new orders contributed to most of the 7.1-point fall in the headline index.
The decline marked the fifth time in two years the barometer has fallen on a year-over-year basis. However, the barometer continues to signal healthy business conditions, which shows a reading above 50.
"The Chicago Business Barometer had a sluggish start to 2019, pressured by significant drops in both new orders and production, resulting in the lowest headline reading in two years," said Jai Lakhani, economist at MNI Indicators, which compiles data for Chicago PMI on behalf of the Institute for Supply Management Chicago.
