Chicago Business Barometer Rebounds in January

Inventories were kept tight by firms to mitigate volatile demand. The inventory index fell below the neutral point in February for the first time in seven months, said MNI Indicators. In contrast, the prices paid index rose for the first time in seven months as downward price pressure eased.

Employment levels were higher in February, but firms reported having difficulty finding qualified employees.

The special question section revealed that 48.9 percent of firms believed an interest rate hike would hurt business, while 46.7 percent said there would be no impact.

Trade issues negatively impacted 42.6 percent of firms surveyed, while one-fourth said they were unaffected.

“The sharp pick-up in the Barometer to a level not seen in over a year, underpinned by the growth in demand and production, showcases a healthy image of the U.S. economy,” said Shaily Mittal, senior economist at MNI Indicators. “With the Fed’s cautious approach towards monetary tightening along with soft inflation, firms remain optimistic about their business activity.”