The Chicago Fed National Activity Index improved to 0.12 in August from minus 0.42 in July
Economic growth rebounded a little last month in the U.S., according to a monthly index set out Monday, though the broader trend remains weak amid high borrowing costs and political uncertainty.
The Chicago Fed National Activity Index improved to 0.12 in August from minus 0.42 in July, the Federal Reserve Bank of Chicago said. A reading above zero is associated with better-than-average economic growth.
Despite August’s recovery, the index’s three-month moving average decreased, suggesting headwinds continue to buffet the economy. The CFNAI diffusion index—which captures how much the change in the monthly index is spread among the indicators over three months—similarly declined to minus 0.23 from minus 0.11 in July. Periods of economic expansion have historically been associated with values of the CFNAI diffusion index above minus 0.35.
Indicators relating to production and employment improved in August, suggesting some good news for the labor market, a key focus of concern in recent months. In contrast, sales, orders and inventories fell back, pointing to faltering demand, while personal consumption and housing also declined, the index showed.
The index comes ahead of nationwide business surveys due to be published later Monday and that are expected to show a broadly stable pace of growth in private-sector activity this month. With inflation cooling and amid signs of sluggish momentum in the U.S. economy, the Federal Reserve last week cut rates by half a percentage point in a bid to inject some dynamism and stave off fears of stagnation.
Source: wsj.com
