Chicago PMI Falls Back Into Negative Territory In May

The Chicago PMI plunged in May to a reading of 46.2 from 52.3 in April. The decline was led by a fall in new orders but all five components of the index weakened below the 50 breakeven mark. The solid reading in April had led analysts to think that the slowdown in activity in the region in the first quarter was temporary. But the May data "suggest this was a false dawn and that sluggish activity has carried through to the second quarter," said Philip Uglow, chief economist at MNI Indicators. The Chicago PMI is the last of the regional indicators before the Institute for Supply Management's national gauge, which is due for release on Monday.