After two months of contraction, MNI Indicators released a report on Friday showing Chicago-area business activity unexpectedly returned to expansion in the month of August.
MNI Indicators said its Chicago business barometer jumped to 50.4 in August after tumbling to 44.4 in July, with a reading above 50 indicating growth in regional business activity. Economists had expected the index to climb to 47.5.
The bigger than expected increase by the business barometer came as the new orders index saw the largest single component monthly gain and shifted back into expansion.
The order backlogs index also surged up to 51.3 in August after three straight months below 50, rebounding strongly after hitting 43.5 in July.
The report said the employment index also rose slightly to 43.7 in August, although it remained in contraction for the second straight month.
Despite the jump by the Chicago business barometer, MNI Indicators said the survey still suggests a softer overall tone in business activity, as the three-month average dipped to 48.2.
On the inflation front, the prices paid index rose to a five-month higher of 59.8 in August, although it is still well shy of the 12-month high of 79.8.
The survey also found that 63 percent of firms intend to leave their current business investment plans for the remainder of 2019 unchanged, citing concerns about global uncertainties.
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