Investing.com - Manufacturing activity in the Chicago-area increased more than expected in February, bolstering optimism over the U.S. economic outlook, industry data showed on Tuesday.
In a report, the Institute for Supply Management (ISM) said its Chicago purchasing managers’ index increased by 7.1 points to a seasonally adjusted 57.4 this month from a reading of 50.3 in January. That was its highest level since January 2015
Analysts had expected the index to rise only 2.7 points to 53.0 in February.
On the index, a number above 50.0 indicates an expansion, while below indicates contraction.
According to the report, the acceleration in demand contributed the most to
the rise.
New orders rose by 10.1 points, moving into expansion territory again, after slipping briefly below 50 in January.
Production was up 4.3 points to a 13-month high of 60.3 in February.
Order Backlogs rose for the second consecutive month, but remained below the breakeven level, where it has sat for three consecutive months.
Employment moved into expansion for the first time in four months hitting the highest level since October 2014.
Supplier Deliveries fell to the lowest level since last October.
“The sharp bounce back in optimism to a level not seen in over two years and growth in output at the highest level for over a year offers an upbeat picture of the U.S. economy,” Shaily Mittal, senior economist at MNI Indicators that helps elaborate the data, said.
“The latest survey shows a continuance of price increases, with Prices Paid at the highest level since September 2014," she added.
"With inflationary pressures on the rise and the job market having improved, the next rate hike could come soon, possibly in the coming quarter,” Mittal concluded.
After the report, EUR/USD was trading at 1.0600 from around 1.0598 ahead of the publication; GBP/USD was at 1.2433 from 1.2434 earlier; while USD/JPY was at 112.09 from 112.08 earlier.
The US dollar index, which tracks the greenback against a basket of six major rivals, was unchanged at 100.99.
Meanwhile, U.S. stock markets were lower after the open. The Dow 30 lost 0.10%, the S&P 500 fell 0.18%, while the Nasdaq Composite traded down 0.32%.
Elsewhere, in the commodities market, gold futures traded at $1,256.85 a troy ounce, compared to $1,257.35 ahead of the data, while crude oil traded at $53.52 a barrel from $53.64 earlier.