WASHINGTON (dpa-AFX) - Indicating temporary factors were at play in January's slowdown, MNI Indicators released a report on Friday showing a substantial reacceleration in the pace of growth in Chicago-area business activity in the month of February.
MNI Indicators said its Chicago business barometer spiked to 64.7 in February after plunging to 56.7 in January, with a reading above 50 indicating growth. Economists had expected the barometer to inch up to 57.0.
The Chicago business barometer recorded its biggest monthly jump since February of 2017 to reach its highest level since December of 2017.
'The sharp pick-up in the Barometer to a level not seen in over a year, underpinned by the growth in demand and production, showcases a healthy image of the U.S. economy,' said Shaily Mittal, Senior Economist at MNI Indicators.
She added, 'With the Fed's cautious approach towards monetary tightening along with soft inflation, firms remain optimistic about their business activity.'
The much bigger than expected rebound by the Chicago business barometer was largely due to a pick-up in demand, with the new orders index recording its largest monthly increase since January of 2016.
The report said the production index also surged up to a six-month high, while the order backlogs index offset January's steep drop.
Meanwhile, MNI Indicators said supplier delivery times continued to subside in February, showing the fourth consecutive decline and hitting the lowest level since June of 2017.
The employment index rose to its highest level since July of 2018, although MNI Indicators noted firms remain concerned about finding the right fit of employees to meet their needs.
On the inflation front, the prices paid indicator showed its first increase in seven months, easing the downward pressure seen on prices through the second half of the last year.
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