ism chicagoThe U.S. Midwest experienced a surge in business activity in October, with new manufacturing orders hitting the highest level since 2004.

In other economic news, the number of weekly jobless claims fell by 10,000 to about 340,000, according to the United States Department of Labor. The jobless numbers indicate that the government shutdown is no longer affecting the economy as federal workers and government contractors return to work.

The news about business in the Midwest led to the Institute for Supply Management in Chicago (ISM-Chicago) to raise its business barometer from a reading of 55.7% to 65.9%.

The ISM-Chicago website notes that the barometer is the highest it has been since March 2011. The website also noted that production, new orders and order backlogs posted double digit gains in October  with “companies seemingly unaffected by the government shutdown.”

“October’s advance in the barometer was its biggest monthly increase in over 30 years and only the third time in the past decade the barometer has risen for four consecutive months,” said an ISM-Chicago press release.

“Chicago-area business expanded at a surprisingly steep pace with some panelists reporting brisk activity linked to inventory replenishment, increased customer demand, success with new product lines and new distribution channels.”

New manufacturing orders reached their highest levels in nine years, according to the report, while production levels reached levels not attained since February 2011.

In the press release, Philip Uglow, chief economist at MNI Indicators, said that even though the government had shut down, Chicago-area businesses “surged ahead.”

“While it is a little surprising to see such a large rise in activity, the consistent increase in the barometer over the past four months suggests the recovery is gaining traction,” Uglow said in the press release.

The jobless numbers may still reflect some volatility because of computer glitches earlier this year in California and Nevada that have led to higher jobless claim numbers, according to a report from the Los Angeles Times.

Still, the Times reported that jobless claim numbers have declined as fewer federal workers file for benefits. For the week ending Oct. 19, just 14,423 federal workers filed a claim, a steep decline from the 44,136 federal workers who filed a jobless claim in the previous week, according to the Times.

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