By Jeffry Bartash, MarketWatch
The numbers: A measure of business conditions in the Chicago region contracted for the third time in four months, reflecting ongoing struggles by American manufacturers as well as the two-week-old General Motors workers strike.
The Chicago PMI business barometer dropped to 47.1 in September from 50.4 in the prior month, MNI Indicators said Monday. Any reading below 50 indicates worsening conditions.
Wall Street had expected a reading of 50.
The barometer averaged 47.3 in the third quarter, the lowest level since the U.S. exited recession in the middle of 2009.
What happened: Production in the Chicago region sank to a 10-year low, but the decline was exaggerated by the strike at GM /zigman2/quotes/205226835/composite GM -0.75% .
Even if the strike is set aside, however, the report showed broad weakness. The backlog of orders and inventories also fell sharply.
Big picture: Eroding business conditions in the Chicago region mirror the nationwide trend in manufacturing. A strong dollar, a slowing global economy and the festering trade dispute between the U.S. and China have curbed demand for goods made in America.
What’s kept the economy going is relatively stable if somewhat softer growth in the much larger service side of the U.S. economy: Recreation, health care, software, finance and so forth.
Analysts and investors are watching closely to see if the slump in manufacturing spreads more deeply into the broader economy
Market reaction: The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.22% and the S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.07% rose in Monday trades. The 10-year Treasury yield /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y +0.10% was little changed at 1.69%.