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MNI Indicators released a report on Tuesday showing an unexpected acceleration in the pace of growth in Chicago-area business activity in the month of July.
The report said the Chicago business barometer rose to a six-month high of 65.5 in July from 64.1 in June, with a reading above 50 indicating growth in business activity. Economists had expected the barometer to dip to 62.3.
The unexpected increase came as all but one of the barometer's components rose during the month, with only the supplier deliveries index losing ground.
Both the new orders index and the production index also rose to six-month highs in July, which MNI Indicators said is traditionally a busy month for firms coinciding with the summer holiday season.
The report also said the employment index rose for the third straight month to a four-month high, indicating firms were more intent on hiring new personnel.
"Despite this, however, there were still reports of firms struggling to source ideal candidates, which continues to hamper recruitment plans," MNI Indicators said.
On the inflation front, MNI Indicators said price pressures continued to impede firms' operations and intensified markedly in July, with the prices paid index reaching its highest level since September of 2008.
"The MNI Chicago Business Barometer started the third quarter in bullish form, with business activity supported by robust demand and output," said Jamie Satchi, Economist at MNI Indicators.
He added, "Input prices continue to be a thorn in the side of businesses, however, with the Prices Paid indicator at the highest in a decade and continuing to signal pipeline inflation."
