After Last Week's Miserable Philly Fed, Chicago Fed Index Bounces Back

Last week the Philly Fed indicated some rough conditions in its market.

But another regional Fed bank has a slightly cheerier take on things.

The Chicago Fed Index bounced back to even (on-trend growth), up from -0.7 in the previous period.


Led by improvements in production-related indicators, the Chicago Fed National Activity Index returned to its historical average of zero in July, up from –0.70 in June. Three of the four broad categories of indicators that make up the index improved from June, but only the production and income category made a positive contribution to the index in July.

The index’s three-month moving average, CFNAI-MA3, edged lower to –0.17 in July from –0.12 in June. July’s CFNAI-MA3 suggests that growth in national economic activity was somewhat below its historical trend. With regard to inflation, the amount of economic slack reflected in the CFNAI-MA3 suggests subdued inflationary pressure from economic activity over the coming year.

Production-related indicators made a contribution of +0.43 to the index in July, up from –0.16 in June. Total industrial production increased 1.0 per cent in July after edging lower 0.1 per cent in June. In addition, manufacturing production rose 1.1 per cent in July after decreasing 0.4 per cent in the previous month, and manufacturing capacity utilization increased to 72.2 per cent in July from 71.4 per cent in June.

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