The latest reading on manufacturing and services activity in the Midwest region crushed expectations.
The Chicago purchasing manager’s index came in at 56.2, the highest since January.
Economists had estimated that the PMI was 49.4 in October, up from 48.7 in the prior period.
The business barometer is a survey of manufacturers and servicers in the area, with a split of about 60/40 respectively.
“The sharp increase in the Barometer pushed it to the highest since January and marks a promising start to the fourth quarter, building on the small gain made in Q3,” the report said. “Production led the latest increase, jumping just under 20 points to 63.4, while New Orders also rose sharply, leaving both at the highest since the start of the year. Firms reported significant growth in inventories, which accounted for part of the leap in output in October.”
Chief economist at MNI indicators Philip Uglow said the September report looked more like a deviation that the start of a trend.
In October’s report, some respondents said they had trouble finding qualified workers, as the employment index fell back to 50.6 from 52.3.
- MNI Indicators