NEW YORK - 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 (CFNAI-MA3) 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 in that month.
The June index was originally reported as negative 0.46, while the June CFNAI-MA3 was first reported as negative 0.60.
The negative reading for the CFNAI-MA3 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 the month (compared to a contribution of positive 0.03 in the previous month), while employment-related indicators contributed positive 0.05 in the month, after providing a negative 0.10 in June, the Fed said.
Consumption and housing-related data contributed negative 0.33 in the month, after contributing negative 0.34 the prior month, while sales, orders and inventories contributed negative 0.06 in the month, after a positive 0.03 contribution in June.
The 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.
Overall, 43 of the 85 indicators made positive contributions to the index in the month and 42 made negative contributions. While 46 indicators were better than the previous month, 13 of these still made negative contributions to the index. Also, 37 indicators deteriorated from June to July, and two were flat.
The index was constructed using data available by August 18, with data for 52 of the 85 indicators having been published by then. The Fed said it used estimates for the missing data.
