Chicago PMI shoots pasts forecasts in June

Market News International's Chicago business barometre jumped from a reading of 59.4 for May to 65.7 in June - its highest level in three years.

The reading for June marked a fifth consecutive monthly increase and left the average print for the second quarter at 66.1, above the average reading of 55.1 observed in the first quarter and at its loftiest level since the second quarter of 2014.

A gauge of new orders registered the largest increase of all the subindices contained in the report, rising by 10.5 points to 71.9.

In parallel, order backlogs reached a level not seen since July 1994, having ceased to fall in the previous month.

The subindex tracking hiring was the only one which fell back, retreating from a reading of 57.1 in May to 56.6 for June.

Price pressures at the factory gate were described as "broadly stable" after having slipped for three straight months, with survey panelists continuing to report higher prices for steel.

"The Chicago PMI is more volatile than the national ISM index but, together with the strong Philly and Empire State readings, today's number increases the chances of a clear gain in Monday's ISM. We look for the index to rise to 57 from 54.9; the consensus forecast is for little change. though that might change after the Chicago report. In short, the industrial recovery appears to be continuing," said Ian Shepherdson, chief economist at Pantheon Macroeconomics.