Business activity in the U.S. Midwest registered a slowdown in August, growing just shy of the pace economists expected, a report showed on Tuesday.

The Institute for Supply Management-Chicago business barometer dropped to 56.7 in August. The reading was 62.3 in July, and economists had forecast an August reading of 57.

The employment component of the index fell to 55.5 from 56.6 in July. New orders fell to 55.0, from 64.6. A reading above 50 indicates expansion in the regional economy.

Meanwhile, business activity in New York City also fell in August to its lowest level in a year, according to an industry survey.

The Institute for Supply Management-New York said its seasonally adjusted index of current business conditions declined to 55.6 in August from a revised 59.4 in July.

The 50 level separates growth from contraction.

Future optimism and job growth eased as well, underscoring signs that the economic recovery is falling back.

The six-month outlook index reached a 14-month low, falling to 58.4 in August from a revised 69.6 in July.

The group's index of job growth shifted into neutral. The employment index hit a 10-month low of 50.0 in August from a revised 51.5 in July.