The Chicago Fed Survey of Economic Conditions (CFSEC) Activity Index rose to +13 in January (from -12 in December), indicating a return to above-trend regional growth.

• The CFSEC Manufacturing Activity Index rebounded to +24 (Dec: -24), while the CFSEC Nonmanufacturing Activity Index improved to +5 (Dec: -9), showing broad-based strengthening led by manufacturing.

• 44% of respondents expect U.S. economic activity to increase over the next 12 months, with expectations improving while remaining net optimistic.

• The pace of current hiring increased, but expectations for hiring over the next 12 months decreased; both hiring indexes stayed negative, implying hiring remains net soft despite a better current reading.

• Expectations for capital spending over the next 12 months decreased, and the capital spending expectations index remained negative, pointing to continued caution on investment plans.

• The labor cost pressures index increased and the nonlabor cost pressures index also increased, but both remained negative, consistent with cost pressure trends still subdued even after January’s pickup.