The Chicago Purchasing Managers Index fell to 46.1 in September rather than rising to the 52 that economists expected. The index, considered a precursor to the national Institute for Supply Management index to be released on Thursday, pointed to a Midwestern manufacturing industry than is weaker than had been expected.
The news on the final day of the third quarter punctured a mild stock rally that followed an upward revision in the Commerce Department's reading for the second-quarter gross domestic product. The government said the GDP, the broadest measure of the economy, sank at a pace of just 0.7 percent in the spring. The new reading was better than the annualized 1.1 percent drop that economists were predicting.
But the Chicago PMI data are fresher, and therefore more troubling, than the GDP. And it reminded investors that the economy still has major obstacles to be overcome before a solid recovery can occur.
Read more: USA Today