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The numbers: A measure of factory activity in the Midwest weakened further in October.
The Chicago Purchasing Management Index sank to 43.2 in October from 47.1 in the prior month. This is the lowest level since December 2015. Economists has expected a reading of 48.3, according to Econoday.
Any reading below 50 indicates deteriorating conditions.
What happened: New orders declined to 37, the lowest level since March 2009. Order backlogs saw the largest monthly decline.
Big picture: The Chicago PMI can be more volatile than the national ISM manufacturing index, which will be released Friday. Manufacturing is facing the brunt of a global trade slowdown and the Midwest is being particularly hammered. The data runs counter to Fed Chairman Jerome Powell’s upbeat assessment of the economic outlook at his press conference on Wednesday.
What are they saying? “The picture is one of continued stress in the manufacturing economy, thanks mostly to the direct impact of the tariffs and the uncertainty over the future direction of trade policy,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
Market reaction: Stocks were lower after the data was released with the Dow Jones Industrial Average DJIA, -0.87% down 78 points in early trading and the S&P 500 index SPX, -0.65% down 3 points.
