Chicago Business Barometer Unexpectedly Indicates Expansion In July
Following twelve straight months of contraction, MNI Indicators released a report on Friday showing an unexpected expansion in Chicago-area business activity in the month of July.
MNI Indicators said its Chicago business barometer spiked to 51.9 in July from 36.6 in June, with a reading above 50 indicating growth in regional business activity. Economists had expected the index to jump to 43.9.
With the much bigger than expected increase, the Chicago business barometer reached its highest level since May of 2019.
The headline index skyrocketed as the new orders index soared to its highest level since August of 2019 and the production index also surged back into expansion territory.
MNI Indicators said some companies noted recovering orders, while others reported continued difficulties due to the Covid-19 effects.
The report also showed a notable increase by the employment index, although MNI Indicators noted there was anecdotal evidence that firms had to lay off staff as a result of the current health crisis.
On the inflation front, the prices paid at the factory gate edged higher, gaining 1.7 points to reach a seven-month high.