The Chicago Business Barometer rose to 66.2 in October from 65.2 in September.
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.
Economists polled by Thomson Reuters predicted a 62.0 reading for the index.
“After a bullish September showing, firms’ optimism regarding the business landscape found further room to grow as they entered the final quarter of the year,” according to a release. “Of the five Barometer sub-components, only Employment and Supplier Deliveries slipped from their respective September levels.”
“Steering the month’s result, both demand and output climbed for the third straight month to robust levels. New Orders rose to its highest level since June and the second highest since May 2014 while Production hit its highest level since August 2014,” the release noted. “Together, both indicators account for 60% of the Barometer.”