RTTNews - Activity in the Chicago-area manufacturing sector continued to contract in the month of May, according to a report released by the Institute for Supply Management - Chicago on Friday, with the pace of contraction unexpectedly accelerating compared to the previous month.
The ISM-Chicago said its index of activity in the sector fell to 34.9 in May from 40.1 in April, with a reading below 50 indicating a contraction. Economists had been expecting the index to edge up to a reading of 42.0.
An acceleration in the pace of contraction in new orders contributed to the continued weakness in the sector, with the new orders index falling to 37.3 in May from 42.1 in April.
The report also showed a notable deterioration in employment in the sector, as the employment index fell to 25.0 in May from 31.8 in the previous month.
At the same time, the pace of the contraction in production was unchanged from the previous month, with the production index stuck at a reading of 38.1.
Additionally, the ISM-Chicago said the inventories index edged up to 31.5 in May from 30.6 in April, although it continued to indicate a contraction.
On the inflation front, the report showed that the prices paid index rose to 29.8 in May from 28.4 in the previous month. The reading for April marked the lowest reading in 60 years.
Next Monday, the Institute for Supply Management is due to release its national report on manufacturing activity in the month of May. Economists expect the index of activity in the sector to edge up to 42.0 in May from 40.1 in April.
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