Chicago PMI At its Highest Point Since August 2008

The Institute for Supply Management-Chicago Inc. said today its activity index rose to 56.1, the highest level since August 2008, from 54.2 the prior month. Readings above 50 indicate expansion. So this suggests business activity is increasing.

[Reuters] “It shows manufacturing activity is holding up after a recovery in the third quarter, and it looks like the bounce we got in the auto sector probably is helping other areas too,” said Gary Thayer, chief macro strategist at Wells Fargo Advisors in St Louis, Missouri.

New orders jumped to 62.8 from 61.4, the highest point since May 2007, even as production rating, while still expanding at a strong rate, sagged as the index dropped from 63.9 to 57.6. Meanwhile, supplier deliveries posted its fastest expansion since January 2008 with the index reading at 57.4. The contraction in order backlogs was also encouraging as the index slowed for the third consecutive month, rising from 41.9 to 46.5.

Milwaukee and Texas also showed gains in manufacturing, other reports showed.

Economists, who closely the Chicago index for an early reading on the outlook for overall U.S. manufacturing, which makes up about 12% of the economy,  projected the index would decline slightly to 53.3.