Chicago PMI improves more than expected in August

Business activity in the Chicago area improved more than expected in August, according to figures released on Thursday.

The MSN Chicago PMI rose 5.9 points to 48.7, coming in comfortably ahead of consensus expectations of 44.1. This marked the highest level since last summer.

Still, Kieran Clancy, senior US economist at Pantheon Macroeconomics, said this improvement is "more noise than signal".

"The Chicago PMI tends to lag the trend in civilian aircraft orders, albeit inconsistently, due to the heavy presence of Boeing," he said.

"With that in mind, a decent chunk of the August jump likely reflects the surge in aircraft orders during the Paris Air Show, held in June.

"Accordingly, the improvement in the Chicago PMI is unlikely to be mirrored elsewhere in the country. We look for a much more modest improvement in the August ISM manufacturing index, due tomorrow, to 47.0 from 46.4."