UPDATE 1-US Midwest business barometer falls in May

(Adds analyst comments)

CHICAGO, May 28 (BestGrowthStock) – Business activity in the U.S.
Midwest grew less than expected in May as employment declined,
a report showed on Friday.

The Institute for Supply Management-Chicago business
barometer dropped to 59.7 in May. The reading was 63.8 in
April, a five-year high, and economists had forecast a May
reading of 62.0.

While the region’s manufacturing and export-heavy economy
is still growing, the drop in the index’s employment component
signals employers are putting production plans on hold,
analysts said.

“That suggests to me that they’re possibly anticipating
some problems from the turmoil in Europe,” said Christopher
Low, chief economist at FTN Financial in New York. “If there’s
going to be an economic consequence of what’s going on in
Europe, it’s going to be seen in employment.”

Global policy makers this month put together a $1 trillion
rescue package designed to stanch a debt crisis sparked by
Greece’s sinking finances. But worries have persisted that the
crisis could slow European economic growth and deal a blow to a
global economy just recovering from a steep downturn.

The employment component of the index sank to 49.2 from
57.2 in April. A reading below 50 indicates contraction.

That figure could have implications for overall U.S. job
growth, analysts said.

“The drop in employment is a big red flag for next week’s
non-farm payrolls report, where analysts are looking for job
growth of as much as 500,000,” said Kathy Lien, director for
currency research at GFT in New York.

Stock Market Investing
(Reporting by Ann Saphir and Emily Flitter and Vivianne
Rodrigues in New York, Editing by Chizu Nomiyama and Padraic
Cassidy)

UPDATE 1-US Midwest business barometer falls in May