Business activity in the Chicago area saw a notable improvement in the month of January, according to a report released by the Institute for Supply Management - Chicago on Thursday, with the Chicago business barometer reaching a nine-month high.
The ISM Chicago said its Chicago business barometer climbed to 55.6 in January from a revised 50.0 in December, with a reading above 50 indicating growth. The increase lifted the index to its highest level since April of 2012.
Economists had been expecting the business barometer to dip to 50.5 from the 51.6 originally reported for the previous month.
A notable acceleration in the pace of production growth contributed to the increase by the business barometer, with the production index jumping to 60.9 in January from 52.4 in December.
The new orders index also surged up to 58.2 in January from 50.4 in December, indicating a substantial acceleration in the pace of new orders growth.
The report also showed a notable turned by employment in the Chicago area, as the employment index climbed to 58.0 in January from 46.8 in December.
The inventories and order backlogs indexes also increased compared to the previous month, although the order backlogs index continued to point to a contraction.
Meanwhile, the ISM Chicago said the prices paid index dipped to 60.7 in January from 62.9 in December, suggesting a slowdown in the pace of price growth.
Jim O'Sullivan, chief U.S. economist at High Frequency Economics, said, "While this report was clearly stronger than expected, the regional data in general have been mixed for January, sending no clear signal for the manufacturing ISM index tomorrow."
Friday morning, the Institute for Supply Management is scheduled to release its report on national manufacturing activity in the month of January.
The ISM's index of activity in the manufacturing sector is expected to come in at 50.7, with a reading above 50 indicating growth in the sector.
by RTT Staff Writer
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