A report released by MNI Indicators on Friday showed that growth in Chicago-area business activity unexpectedly saw a significant acceleration in the month of June.
MNI Indicators said its Chicago business barometer jumped to 65.7 in June from 59.4 in May, with a reading above 50 indicating growth in activity. The barometer climbed to its highest level in over three years.
The notable increase came as a surprise to economists, who had expected the business barometer to edge down to 58.0.
The unexpected jump by the business barometer came amid an acceleration in demand, as the new orders index surged up to 71.9 in June from 61.4 in May to reach its highest level since May of 2014.
The production index also climbed to 67.7 in June from 63.2 in May, while the order backlogs index also saw another significant increase after jumping out of contraction territory in the previous month.
"June's MNI Chicago Business Barometer Survey is a testament to firms' expectations of a busy summer," said Shaily Mittal, Senior Economist at MNI Indicators.
She added, "With Production and New Orders touching levels not seen in three years, rising pressure on backlogs and delivery times has led to higher optimism among firms both in general business conditions and the local economy."
Meanwhile, the report said the employment index slipped to 57.1 in June from 56.6 in May, indicating a modest slowdown in the pact of job growth.
MNI Indicators said panelists were concerned about finding reliable, well qualified workers and there was a rise in temporary hires, a growing job market trend in recent months.
With regard to inflation, the report said inflationary pressures at the factory gate remained broadly stable after easing for three straight months.
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