What the Chicago Business Barometer Today Reveals About January's Economic Surge

A significant turnaround in Chicago’s business activity has caught economists’ attention this month. The Chicago business barometer today rebounded sharply, climbing to 54.0 in January from a downwardly revised 42.7 in December, marking a spectacular 11.3-point jump. This surge is particularly noteworthy because it signals a return to expansionary territory—any reading above 50 indicates economic growth—for the first time since November 2023. The rebound far exceeded expectations; economists had only anticipated a modest rise to 44.0, making January’s performance a pleasant economic surprise.

Strong Employment and Production Gains Drive the Recovery

The robust performance of the Chicago business barometer today was underpinned by substantial improvements across multiple economic indicators. The employment index rocketed upward by 17.5 points, reaching its strongest level since December 2024, though it remains slightly below 50. Even more impressive, the new orders index climbed by 15.8 percent to its highest point since March 2022, suggesting businesses are becoming increasingly confident about future demand. The order backlogs index jumped by 11.5 points and crossed above 50 for the first time since December 2022, indicating a healthier pipeline of work for manufacturers and service providers. Additionally, the production index advanced by 9.1 points to its highest level since December 2023, now sitting well above the 2025 average.

Price Pressures Take a Step Back

In a welcome development for businesses concerned about cost inflation, the prices paid index retreated by 9.0 points, unwinding four consecutive months of increases and dropping to its lowest level since January 2025. This cooling in price pressures suggests companies are experiencing some relief on the cost front, which could support broader economic expansion and profitability.

The data compiled by MNI Indicators paints a picture of renewed economic momentum in Chicago’s business community, with the barometer today offering clear evidence that growth is returning across multiple dimensions of economic activity.