2017.10.3110:20:00UTC+00Chicago Business Barometer Unexpectedly Rises To Six-Year High In October

Growth in Chicago-area business activity unexpectedly accelerated in the month of October, according to a report released by MNI Indicators on Tuesday.

MNI Indicators said its Chicago business barometer rose to 66.2 in October from 65.2 in September, with a reading above 50 indicating growth.

The increase surprised economists, who had expected the barometer to drop to 61.0. With the unexpected uptick, the barometer reached its highest level since March of 2011.

The unexpected increase by the barometer reflected continued growth in both demand and output, as the new orders index reached its highest level since June and the production index climbed to its highest level since August of 2014.

Of the five barometer sub-components, only the employment index and the supplier deliveries index decreased from the previous month.

The employment index slipped into contraction territory, with MNI Indicators noting firms have resorted to having existing staff work overtime or to hiring temporary workers due to a shortage of skilled and trained workers.

"Firms kicked off Q4 in buoyant mood with only 12% expecting activity to decline between now and the close of the year," said Jamie Satchi, Economist at MNI Indicators.

Satchi added, "Despite the MNI Chicago Business Barometer hitting a six-and-a-half year high, and output and demand in seemingly rude health, concerns remain over firms' inability to attract and retain skilled workers."

On the inflation front, MNI Indicators said inflationary pressures at the factory gate softened in October, losing almost half of the previous month's sizeable gain.