(Bloomberg News) Businesses in the U.S. unexpectedly expanded at a faster pace in June and consumer confidence reached a 10-week high, signs that economic growth may pick up in the second half of the year.

The Institute for Supply Management-Chicago Inc.'s business barometer climbed to 61.1, exceeding the highest forecast in a Bloomberg News survey, from 56.6 in May. Readings greater than 50 signal expansion. The Bloomberg Consumer Comfort Index rose to minus 43.9 from minus 44.9.

Stocks climbed for a fourth day as the Chicago group's figures indicated manufacturing is rebounding after a lull brought on by parts shortages tied to the March earthquake in Japan. The data underscore the view of Federal Reserve policy makers that the first-half slowdown will prove "temporary," as fuel prices become less of a burden for companies and consumers.

"The headwinds from the supply-chain disruption might have started to ease," said Conrad DeQuadros, a senior economist at RDQ Economics LLC in New York. "We'll see a pickup in economic growth in the second half."

The Standard & Poor's 500 Index gained 1 percent to 1,319.87 at 11:15 a.m. in New York, also helped by the Greek parliament's support for a European bailout. Treasuries declined, pushing up the yield on the benchmark 10-year note to 3.17 percent from 3.11 percent late yesterday.

Economists called for the Chicago barometer to drop to 54, according to the median forecast in the Bloomberg survey. Estimates of the 54 economists surveyed ranged from 49.5 to 58.5.

Orders, Production

The purchasing group's gauge of new orders climbed to 61.2 in June from 53.5, while the production index increased to 66.9 from 56. Measures of employment, backlogs and inventories eased this month.

Stronger manufacturing may help the labor market rebound in coming months. More Americans than forecast filed first-time applications for unemployment benefits. Jobless claims dropped by 1,000 to 428,000 last week, the Labor Department said today. Economists surveyed by Bloomberg projected 420,000 claims, according to the median estimate.

The claims figures may be influenced by earlier-than-usual auto plant shutdowns. Carmakers that have had difficulty getting parts from Japan may be using the period as an opportunity to retool for new models.

As facilities close, the increase in the number of workers filing for unemployment claims may be distorting the government's figures, economists such as Joe LaVorgna at Deutsche Bank Securities LLC said.

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