Chicago PMI rises more than expected in September

The Chicago Purchasing Managers’ index rose to 54.2 from 51.5 in August, beating expectations for a reading of 52.5.

The rise was driven by a sharp gain in production, which increased 7.3 points to 59.8, marking its highest level since January 2016.

Meanwhile, new orders and order backlogs, which led the fall last month, were little changed in September, with the latter failing to bounce back above the 50 break-even level.

Employment was the only barometer component that dropped, having rallied to a 16-month high last month.

Lorena Castellanos, senior economist at MNI Indicators, said: “Economic growth in the US appears to have picked up a little at the end of the third quarter and although the employment component fell, this was on the back of a relatively strong showing in the previous month.

“Note employment usually lags changes in orders and output, so it was not that surprising to see this component weakening in September.”

Pantheon Macroeconomics said: "This is something of a relief, following the grim August ISM manufacturing report and the weak September Philly Fed/Empire State surveys. It is not conclusive evidence of anything, but it does at least support the idea that the Philly and Empire State numbers might not be right in signalling a further drop in the ISM."