Economic activity in Chicago area unexpectedly improves

Economic activity in the Chicago area unexpectedly improved in June, according to data released on Friday.

The MNI Chicago Business Barometer rose to 65.7 from 59.4 the month before, beating expectations for a decline to 58.0 and marking its highest level in more than three years.

The improvement was led by four out of the five barometer components, with only the employment index falling slightly.

New orders rose by 10.5 points to 71.9, the highest level since May 2014, while the production indicator was up 4.5 points to 67.7. Order backlogs grew significantly in June, to a level not seen since July 1994, after rising out of contractionary territory last month.

Shaily Mittal, senior economist at MNI Indicators, said: “June's MNI Chicago business barometer survey is a testament to firms' expectations of a busy summer. With production and new orders touching levels not seen in three years, rising pressure on backlogs and delivery times has led to higher optimism among firms both in general business conditions and the local economy."