Business activity in Chicago slowed down slightly in August as supply and labor shortages persisted.
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The Chicago Business Barometer dropped to 66.8 in August from 73.4 in July, a two-month low. The main five indicators of the barometer reading are new orders, order backlogs, production, supplier deliveries, and employment.
Among the indicators, order backlogs recorded the largest increase, while production posted the most significant decline. Order backlogs jumped 11.6 points to 81.6, as firms reported a shortage of materials, insufficient staff, and freight inconsistencies.
Supplier deliveries rose 6.3 points to a three-month high of 92.8. Inventories jumped 6.2 points to 48.8, the highest since March but still signaling contraction.
Demand for labor increased slightly in August, with the employment index rising 0.8 points to 48.3 as companies struggled to find qualified workers for available jobs.
On the demand side, production in Chicago dropped by 7.8 points in August to 61.0. New orders also slowed down to 67.8, indicating that demand continues to improve at a slower rate than that of July.