Chicago PMI surges past expectations in November

Economic activity in the Chicago area improved much more than expected in November, hitting its highest level since January last year.

The Chicago purchasing managers’ index rose to 57.6 from 50.6 the month before, comfortably surpassing economists’ expectations for a reading of 51.8.

Meanwhile, the barometer’s three-month average, which provides a better picture of underlying economic activity, rose to 54.1 from 52.1 in the three months to October.

The rise in new orders contributed the most to the increase in the barometer, up 10.7 points to 63.2 in November, while order backlogs jumped out of contractionary territory, where they had been over the past three months.

Shaily Mittal, senior economist at MNI Indicators, said: “The November reading for the business barometer marked the sixth month of expansionary business activity in the US. Strength in orders, a recovery in oil prices and the stronger dollar have all impacted businesses with varying degrees.

“Respondents to our survey also remain optimistic about business activity in 2017 although the new government’s policies and the Fed’s approach towards monetary tightening would impact the course of business activity over the next year.”