U.S. economic growth slowed in August as industrial activity moderated, data from the Federal Reserve Bank of Chicago showed Monday.
The Chicago Fed National Activity Index fell to minus 0.16 in August from a revised 0.07 in July. A reading below zero suggests economic activity is expanding at a slower rate than its average historical trend.
The CFNAI index, designed to gauge overall economic activity and inflationary pressures, is composed of 85 economic indicators from four broad categories of data: production and income; employment, unemployment and hours; personal consumption and housing; and sales, orders and inventories.
All four categories dragged the indicator down in August, albeit at different degrees of strength.
The contribution from production-related indicators contracted the most on month, tumbling to minus 0.02 from a positive 0.12 in July. It came as industrial production growth slowed in the month, increasing 0.4% compared with 0.7% in July, the Chicago Fed said.
The contribution of personal-consumption and housing indicators also declined, to minus 0.08 from 0.03 in July. However, employment-related indicators made an unchanged contribution to the headline index, while the contribution from sales improved, albeit it remains in negative figures.
The CFNAI diffusion index—which captures how much the change in the monthly index is spread among the 85 indicators over three months—weakened slightly in August to minus 0.04, but the index’s headline three-month moving average ticked up marginally to minus 0.14 in August from minus 0.15, the data said.
Both indicators suggest that the U.S. economy expanded in the month, as they are above the respective minus 0.35 and minus 0.70 values that have historically been associated with economic growth.
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