The Chicago Fed National Activity Index for October remained negative, declining to negative 0.73 from an upwardly revised negative 0.30 reading in September, originally reported as negative 0.45. Meanwhile, the three-month moving average, or CFNAI-MA3, declined to negative 0.56 in October after September’s number was upwardly revised to negative 0.25 from negative 0.31, the Federal Reserve Bank of Chicago reported yesterday.In October 2006, the index was negative 0.43 and the CFNAI-MA3 was negative 0.28.The negative reading for the CFNAI-MA3 indicates national economic growth was below its historical trend and suggests little inflationary pressure in the coming year.Production-related indicators contributed negative 0.39 to the index in October compared to negative 0.04 in September, while employment-related indicators contributed negative 0.20 compared to negative 0.07, the Fed said. Consumption and housing-related data contributed negative 0.14 in October, a slight change from negative 0.16 the prior month, while sales, orders, and inventories contributed positive 0.01 after a negative 0.04 contribution in September.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 the national economy is expanding at its historical trend growth rate, negative values are associated with below-trend growth, and positive values indicate above-trend growth. Overall, 21 of the 85 indicators made positive contributions to the index last month and 64 made negative contributions. While 43 indicators were better than in September, 26 of these still made negative contributions to the index. In addition, 41 indicators deteriorated in October.

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