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News > Economy
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Manufacturing growth slows
Chicago purchasing managers' index for July shows sector still expanding but at a slower pace.
July 31, 2002: 10:48 AM EDT

NEW YORK (CNN/Money) - U.S. manufacturing activity in the Midwest expanded for the sixth straight month in July but at a slower pace than in June, according to data released Wednesday, and analysts said it suggests the Federal Reserve may keep rates steady for longer than earlier anticipated.

The National Association of Purchasing Management-Chicago index fell to 51.5 in July from 58.2 in June. It was the sixth straight reading above 50, pointing to an expanding regional manufacturing economy. A reading below 50 signals contraction.

Economists polled by Reuters had forecast the July index at 56.7. The index began to show signs of improvement early this year, with February marking the first time in 18 months the index was above 50.

"We tend to look at this and the Philadelphia index as an indication of what is going on in the overall economy," said Robert Brusca, chief economist at Echobest Consulting. "Most disturbing is that order backlogs are running over 50 percent, which is the glorified neutral. It's at 6 percentage points below, that's bad -- it shows companies are cannibalizing orders to move ahead."

The employment component of the index fell to 48.1 after reaching 48.9 in June. Prices paid rose to 64.5 from 58.2.

Recent data on the U.S. economy have been weak. An advance reading of second-quarter gross domestic product showed the economy grew at an annual rate of 1.1 percent, compared with downwardly revised growth of 5.0 percent in the first quarter. July consumer confidence data released Tuesday came in at 97.1, down from 106.3 in June, and last week's survey from the University of Michigan came in at 88.1 for July, its lowest level since November 2001.  Top of page


--from staff and wire reports




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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.