Chicago PMI jumps to 65.2 in Sept.
The Chicago Business Barometer rose to 65.2 in September from 58.9 in August, the ISM-Chicago reported on Friday. It was the highest level in three months and the second highest in more than three years.
Economists polled by IFR Markets predicted a 58.5 reading for the index.
The index summarizes current business activity and is also known as the Chicago Purchasing Manager Index or Chicago PMI. The data is compiled on a seasonally adjusted basis.
An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion.
“The strong outturn in September means that on a quarterly basis business activity was broadly unchanged from an already impressive Q2,” said Jamie Satchi, Economist at MNI Indicators. “Looking forward, firms are on record expecting a busy Q4 despite disruptions caused by the recent storms, with just a handful expecting delivery times to lengthen between October through December.”
The ISM said the sharp rise in sentiment was the result of widespread gains, though particularly concentrated in demand, backlogs and employment as together these accounted for 60% of the headline index. The increases in production and supplier deliveries accounted for the remaining 40%, but were slightly more modest in comparison.
The adverse weather conditions also led some companies to stockpile goods as a precautionary measure. The inventories indicator rose 8.4 points to the highest level since March.
And after three straight monthly declines, the employment indicator returned to above 50 in September. Despite the increase, firms still reported difficulty in finding skilled workers while there was evidence of firms hiring temporary staff and staff working overtime hours, the ISM said.