NEW YORK - The Chicago Fed National Activity Index for August declined to negative 0.53 from a revised negative 0.11 reading in July, originally reported as zero.
Meanwhile, the three-month moving average (CFNAI-MA3) slipped to negative 0.42 in August, from July’s revised negative 0.27 reading, initially reported as negative 0.17, the Federal Reserve Bank of Chicago reported Monday.
In August 2009, the index was negative 0.56, while the CFNAI-MA3 was negative 0.79 in that month.
The negative reading for the CFNAI-MA3 indicates national economic growth was somewhat below its historical trend, and suggests subdued inflationary pressure from economic activity in the coming year, the Chicago Fed said.
None of the four broad categories of indicators that are used to construct the index posted a positive contribution in the month.
The production indicators were flat in the month (compared to a contribution of positive 0.23 in the previous month), while employment-related indicators contributed negative 0.12 in the month, after providing a positive 0.09 in July, the Fed said.
Consumption and housing-related data contributed negative 0.40 in the month, after contributing negative 0.44 the prior month, while sales, orders and inventories contributed negative 0.01 in the month, after a positive 0.01 contribution in July.
The index is a weighted average of 85 indicators of national economic activity, and is constructed to have an average value of zero and a standard deviation of one. A zero value for the index indicates that the national economy is expanding at its historical trend rate of growth; negative values are associated with below-trend growth while positive values indicate above-trend growth.
Overall, 34 of the 85 indicators made positive contributions to the index in the month and 51 made negative contributions. While 42 indicators were better than the previous month, 19 of these still made negative contributions to the index. Also, 42 indicators deteriorated from July to August and one was flat.
The index was constructed using data available by September 23, with data for 52 of the 85 indicators having been published by then. The Fed said it used estimates for the missing data.
