The Chicago Fed National Activity Index for July improved to negative 0.06 from a revised negative 0.38 reading in June, while the three-month moving average narrowed to negative 0.29 in July from June's revised negative 0.54, the Federal Reserve Bank of Chicago reported Monday.

In July 2010, the index was positive 0.27, while the CFNAI-MA3 was zero.

The June index was originally reported as negative 0.46, while the June CFNAI-MA3 was initially reported as negative 0.60.

The negative reading for the index indicates national economic growth was below its historical trend, and suggests subdued inflationary pressure from economic activity in the coming year, the Chicago Fed said.

The production indicators contributed negative 0.28 in July, down from a contribution of positive 0.03 in June, while employment-related indicators contributed positive 0.05 in the month, after providing a negative 0.10 in June.

Consumption and housing-related data contributed negative 0.33 in the month, after contributing negative 0.34 July, while sales, orders and inventories contributed negative 0.06 in the month, after a positive 0.03 contribution in June.

The National Activity Index is a weighted average of 85 indicators of national economic activity. 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.

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