A stunningly weak performance by the Chicago Purchasing Managers index has some economists wondering whether the U.S. economy is starting to show signs of a slowdown.

The index, a closely watched measure of manufacturing activity in the Chicago area, plunged to 49.2 in August, down from 63.5 in July. This is well below the consensus forecast of 61, and below the break-even line. Anything above 50 indicates economic growth.

“Manufacturing activity in the Chicago region collapsed in August,” notes National Bank Financial Inc. It reports the 14-point decline — a 22% drop — is the equivalent of a three-standard deviation move. “A fall of this magnitude has NEVER been observed outside recessions. In fact, the only two precedents for a drop of this magnitude are the 1974 and 1980 oil shocks,” NBF says.

However, NBF notes that in those earlier episodes, the economy had already been in recession for a few months and monetary policy was restrictive. “While the Chicago reading may be symptomatic of malaise in the auto sector, we do not think that the August reading should be extrapolated to the rest of the economy,” it says. “At this point, and based on the bullish signals provided by all the other regional surveys already published this month, we remain confident that tomorrow’s reading for the national Institute for Supply Management will depict an economy that is still expanding.”

The ISM August survey is scheduled for release Thursday morning.

Ian Morris, chief economist at HSBC Securities (USA) Inc., notes that earlier regional reports [for New York and Philadelphia] were strong, so “there is the possibility that today’s very weak Chicago PMI is a rogue report.”

“However, given high energy prices, it may be the case that all the regional and national Surveys are due for a fall, and Chicago represents the first report to do so,” he notes. “In that case, Thursday’s August ISM manufacturing survey has significant downside risk.”

Morris says the 85% correlation between the Chicago PMI and ISM suggests ISM could also fall to around the 50 level. Before the Chicago PMI, HSBC was predicting a 56 number for the ISM, “but given today’s news, we are changing our forecast down a couple of points to 54.”

As for the Chicago report, HSBC notes that, “New orders were hit hard, down to 46.5 from 69.6. For this auto-heavy region, this may be due to the fact that auto sales were so high in July (second highest on record) that it was inevitable that lower orders would eventuate in August. Supply deliveries remain sub-50 for the third consecutive month. Production, however, remains in growing territory, although down sharply from 70.7 to 56.2. A sharp rise in inventories to 60.3 (from 56.1) may have caused the production slowdown.