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Chicago Fed National Activity Index below average in June
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Led by improvements in housing-related indicators, the Chicago Fed National Activity Index increased to –0.46 in June from –0.55 in May; however, the index remained negative for the third consecutive month. Three of the four broad categories of indicators that make up the index improved in June, but only one made a positive contribution to the index.
The index’s three-month moving average, CFNAI-MA3, decreased to –0.60 in June from –0.31 in May, reaching its lowest level since October 2009. June’s CFNAI-MA3 suggests that growth in national economic activity was below its historical trend. With regard to inflation, the economic slack reflected in June’s CFNAI-MA3 suggests subdued inflationary pressure from economic activity over the coming year.
The consumption and housing category contributed –0.31 to the index in June, up from –0.42 in May; the June contribution was the category’s highest since March 2010. Housing starts rose to 629,000 annualized units in June from 549,000 in May, and building permits increased to 624,000 annualized units in June from 609,000 in the previous month.
Posted: July 25, 2011 Monday 08:30 AM