US Sept Chicago Purchasing Managers Index falls to 48.1

Chicago Purchasing Management Association said its index of regional business activity fell dramatically to 48.1 in September from 54.9 in August.

A reading below 50 signals a contraction in economic activity. The decline is the first after seven months of expansion in the index.

The fall was significantly larger than expected. Economists had called for the Chicago PMI to decline to 53.0 in September.

The index had risen to 54.9 in August rebounding from its fall to 51.5 in July.

New orders, prices paid and supplier deliveries all declined during September. The new orders index fell to 49.2 in September from 55.8 in the previous month. The prices paid index fell to 57.6 in September from 63.6 in August.

The supplier deliveries index fell to 50.2 from 54.8 in the previous month. The employment index remained below 50, unchanged at 44.6 from 44.6 in August.

The Chicago survey is important to financial markets as a precursor of the larger national survey released by the Institute for Supply Management.

The ISM September survey will be released tomorrow morning.