Chicago Fed PMI Rises, Tops Consensus

Small-sample reports on June's economy have been mixed, showing slowing for manufacturing in the Philly and Markit reports but overall acceleration for Chicago. The Chicago PMI rose 1.4 points to what may be an overheated 64.1 that easily tops Econoday's consensus range.

Orders are the convincing center of strength for this sample showing sizable growth in both new orders and unfilled orders. But indications on output actually slowed in the month perhaps the result of capacity stress that includes lengthening lead times that are near 14-year highs and rising input costs that are at 7-year highs.

In special questions, nearly a quarter of the sample said trade issues are affecting purchasing decisions and nearly 40 percent said they are starting to raise wages. Business in Chicago's sample is very good, perhaps too good which points to the risk of imbalances.