FXstreet.com (Barcelona) - Business activity in the Chicago Fed area has declined in January to levels at the verge of contraction, according to the latest Chicago Business Barometer.

The business activity index has decreased to 51.5 in January from 56.4 in December, revised down from the initial 56.6. Still in levels above 50, which shows expansion of activity, while levels below 50 show contraction.

The employment index has decreased to 47.0 in January from 49.3 in December, and the new orders index fell to 44.7 from 56.7 on the previous month. The prices index, however has jumped to 81.7 in January, from 67.4 in December, while the supplier deliveries index increased to 61.7 in January from 48.7 in December.

According to Ian Shepherdson, Chief U.S. Economist at High Frequency Economics the sub indexes show more concerning aspects than the headline: in particular, the key new orders index plunged to just 44.7 - the lowest since May 03 -from 56.7. Production dropped sharply too, falling 10.7 points to 51.3. Employment also fell, down to 47.0 from 49.3. These numbers are not at recession levels, but they are only one bad month away, and they suggest, like the Philly Fed, that the manufacturing sector is coming under increasing pressure.