The pace of business activity in the U.S. Midwest slowed in March as the new order rate pulled back, a report showed on Thursday.

The Institute for Supply Management-Chicago business barometer fell to 52.4 from 56.8 in February, shy of economists' expectations for 56.5.

A reading above 50 indicates expansion in the regional economy.

The gauge of new orders slipped to 53.0 from 60.2, while the employment component edged down to 55.1 from 55.7.