The ISM-Chicago business barometer bounced into growth mode in July following five months of slowdown. The growth was led by advances in production and new orders, even as prices hit a 28-year high and employment remained in contraction for the eighth straight month.

The headline index grew at 50.8 in July, the first spurt of growth since January, following a 49.6 reading in June. Economists were expecting modest contraction at 49.0.

Prices paid soared to 90.7 in the month, the highest reading since 1980, following an 85.5 reading in June. The prices index has a six-month average of 85.0.

Production gained four points but remained in modest slowdown at 49.2, while new orders saw the fifth month in a row of growth, moving up to 53.5 from a previous 52.0.

Inventories advanced more than four points to 54.9 to mark the second straight month of growth.

The Chicago Business Barometer, a regional survey of business activity in Illinois, Indiana, and Michigan, is released by the Institute for Supply Management and Kingsbury International.

By Patrick McGee and edited by Nancy Girgis