The release of worse-than-expected Chicago PMI dampened risk sentiment amongst investors already digesting poor home sales data.
The manufacturing activity in the area of Chicago dropped more than expected last month. The closely watched fell 3.0 from November’s reading which was the highest since January 2015.
In a report released on Friday, the ISM (Institute for Supply Management)) revealed its Chicago purchasing managers’ index fell to a seasonally adjusted figure of 54.6 for December. This was down from a reading of 57.6 recorded in November.
Surprise Decline
The surprise decline came after analysts had been expecting the index to decline 0.6 points in December, down to 57.0.
Readings above 50.0 indicate an economy in contraction, whilst readings below 50.0 indicate an economy in contraction.
Manufacturing in the world’s largest economy has been gradually regaining momentum following the beating it had taken from the large fall in oil prices dating back to 2014. The final quarter for the PMI whilst at a 2-year high, was expected to stay strong . Many of the respondents for the PMI believed that the Trump administration would have a positive effect on their business.
The close of trading on Friday saw the US dollar index 0.28% lower, valuing the USD at $102.37
