* Chicago business gauge dips to 58.4 in October
* Texas factory activity positive for first time in 6 months
(Adds details, quote)
NEW YORK (Reuters) - The pace of business activity
in the U.S. Midwest slowed modestly in October as new orders
eased, though the employment gauge rose to its highest level
in six months, a report showed Monday.
The Institute for Supply Management-Chicago business
barometer slipped to 58.4 from 60.4 the month before, falling
short of expectations of 59.0, according to a Reuters poll. A
reading above 50 indicates expansion in the regional economy.
The new orders gauge fell to 61.3 from 65.3, but the
employment component of the index climbed to its highest level
since April, rising to 62.3 from 60.6.
The order backlog component also rose to 51.2 from 45.4.
"The dip in the headline sentiment number is reflected in
the orders index ... but remember that two months ago (new
orders) was at 56.9, so progress has been made," Ian
Shepherdson, chief U.S. economist at High Frequency Economics,
wrote in a note.
The report comes a day before the larger national
manufacturing survey from the Institute for Supply Management.
Economists said the survey did not change their expectations
for Tuesday's ISM report, which is forecast to show the pace
of growth in the sector picked up this month.
Manufacturing growth has weakened since the spring due to
supply chain disruptions and faltering confidence in the
economy, though activity in Chicago has held up better than
some other regions that have contracted in recent months.
Separately, the Dallas Federal Reserve Bank's Texas
manufacturing outlook survey showed business activity jumped
to 2.3 this month from minus 14.4 -- its first positive
reading in six months.
New orders rose to 8.3 from 3.6. Businesses' outlook also
improved with the gauge of activity in the next six months
climbing to 14.7 from minus 1.5.
Financial markets had little reaction to the data as
risk-averse investors dumped stocks and pushed into U.S.
Treasuries following the dollar's rise after Japan's
intervention to weaken the yen.
(Reporting by Leah Schnurr; Editing by Jan Paschal)
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