Chicago Fed Index Up Slightly in June

By July 25, 2011Economy

Summarizing many of the publicly available data sets, the Chicago Federal Reserve Bank’s National Activity Index moved slightly higher from -0.55 in May to -0.46 in June.  The index remained negative for the third month in a row, reflecting continued weakness in the national economy.

This index is distinctive in that a recession is deemed more likely when the three-month moving average moves below -0.70.  The current three-month moving average is -0.60, which is too close for comfort, mainly due to a large contraction in April. Fortunately, the index is moving in the right direction now, albeit still in negative territory.

One of the strongest contributors to the index was the Institute for Supply Management’s Purchasing Managers Index, which rose in June, helping to lift the sales, orders and inventories category. Improvements in industrial production and housing starts also helped to lift the index for the month. Employment, however, had a negative influence, with weak nonfarm payroll growth and a rising unemployment rate.

Chad Moutray is chief economist, National Association of Manufacturers.

Chad Moutray

Chad Moutray

Chad Moutray is chief economist for the National Association of Manufacturers (NAM) and the Director of the Center for Manufacturing Research for The Manufacturing Institute, where he serves as the NAM’s economic forecaster and spokesperson on economic issues. He frequently comments on current economic conditions for manufacturers through professional presentations and media interviews. He has appeared on Bloomberg, CNBC, C-SPAN, Fox Business and Fox News, among other news outlets.
Chad Moutray

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