NEW YORK - The Chicago Fed National Activity Index for July improved to zero, its historical average, from a revised negative 0.70 reading in June, originally reported as negative 0.63.
Meanwhile, the three-month moving average (CFNAI-MA3) slipped to negative 0.17 in July, from June’s revised negative 0.12 reading, initially reported as negative 0.05, the Federal Reserve Bank of Chicago reported Monday.
In July 2009, the index was negative 0.07, while the CFNAI-MA3 was negative 1.32 in that month.
The slightly 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.
The production indicators contributed positive 0.43 to the index (compared to a contribution of negative 0.16 in the previous month), while employment-related indicators were flat in the month, after providing a negative 0.14 in June, the Fed said.
Consumption and housing-related data contributed negative 0.43 in the month, after contributing negative 0.46 the prior month, while sales, orders and inventories also held steady in the month, after a positive 0.06 contribution in June.
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, 46 of the 85 indicators made positive contributions to the index in the month and 39 made negative contributions. While 56 indicators were better than the previous month, 20 of these still made negative contributions to the index. Also, 28 indicators deteriorated from June to July.
The index was constructed using data available by August 19, with data for 52 of the 85 indicators having been published by then. The Fed said it used estimates for the missing data.
