Chicago Business Barometer in July Shows Manufacturing Crawling Out of Contraction

The Chicago Business Barometer in July found manufacturing activity in the U.S. Midwest increased to a six-month high in July, topping economists’ forecasts. The Institute for Supply Management survey showing expansion in the region for the first time since April, a report showed on Friday.

“The recent weakness in the Chicago Business Barometer had sounded a few alarm bells over the resilience of the US economic recovery,” Chief Economist of MNI Indicators Philip Uglow said. “The positive start to the third quarter, however, suggests that activity bounced back firmly as firms saw orders and output increase sharply.“

The Chicago Business Barometer for July was 54.7, according to the MNI Chicago Report. Economists had forecast the index at 50.5 for July, after June’s reading of 49.4. A reading above 50 indicates expansion in the sector. July’s reading was the highest since January, when it read 59.4.

“Prices Paid increased by 1.2 points to 54.5 in July, the highest since December and the third consecutive rise,” the ISM report said. “It was, though, too early for the recent sharp fall in crude oil prices to be reflected in the survey results and the small increase in Prices Paid may well prove short-lived.”