Chicago Fed June National Activity Index +0.14; -0.04 In May
CHICAGO -(Dow Jones)- The Chicago Fed National Activity Index hit its highest level in two years in June, rising to +0.14 from an upwardly revised -0.04 reading in May.
June's figure marked the second time this year the monthly index was above zero. The index has increased in each of the past four months after hitting - 0.32 in February.
Production and income gains had the strongest positive impact on the indicator, while employment-related data continued to weigh on the index.
With June's increase, the three-month moving average, or CFNAI-MA3, rose to - 0.03 from -0.17, marking the second straight monthly gain. However, the key average extended its streak to 23 consecutive months below zero.
A zero reading means the economy is expanding at a sustainable pace, balancing growth against inflationary pressures.
"The recent increase in the CFNAI-MA3 indicates that the national economy is improving, and its value near zero suggests that the pace of growth is not far from the long-run historical average," the Chicago Fed said.
First released in March 2001, the CFNAI is a compendium of 85 different economic indicators grouped into five broad categories. Readings above zero indicate an economy growing above its long-term trend rate, with the potential for rising inflationary pressures ahead.
Four of the five broad categories contributed positively to the index in June. An important area of strength was the manufacturing sector, which expanded again in June. Capacity utilization rates in the industry rose to 74.5%, while industrial production increased 0.l7%. The Institute for Supply Management's Purchasing Managers' index also rose in June to 56.2.
While nonfarm payrolls rose last month, the 36,000 gain was below historical averages, the Chicago Fed said, and that negatively impacted the CFNAI.
-By Michael McHugh, Dow Jones Newswires; (312)750-4142; michael.mchugh@
dowjones.com
(This story was originally published by Dow Jones Newswires)
Copyright (c) 2002 Dow Jones & Company, Inc.
All Rights Reserved
CHICAGO -(Dow Jones)- The Chicago Fed National Activity Index hit its highest level in two years in June, rising to +0.14 from an upwardly revised -0.04 reading in May.
June's figure marked the second time this year the monthly index was above zero. The index has increased in each of the past four months after hitting - 0.32 in February.
Production and income gains had the strongest positive impact on the indicator, while employment-related data continued to weigh on the index.
With June's increase, the three-month moving average, or CFNAI-MA3, rose to - 0.03 from -0.17, marking the second straight monthly gain. However, the key average extended its streak to 23 consecutive months below zero.
A zero reading means the economy is expanding at a sustainable pace, balancing growth against inflationary pressures.
"The recent increase in the CFNAI-MA3 indicates that the national economy is improving, and its value near zero suggests that the pace of growth is not far from the long-run historical average," the Chicago Fed said.
First released in March 2001, the CFNAI is a compendium of 85 different economic indicators grouped into five broad categories. Readings above zero indicate an economy growing above its long-term trend rate, with the potential for rising inflationary pressures ahead.
Four of the five broad categories contributed positively to the index in June. An important area of strength was the manufacturing sector, which expanded again in June. Capacity utilization rates in the industry rose to 74.5%, while industrial production increased 0.l7%. The Institute for Supply Management's Purchasing Managers' index also rose in June to 56.2.
While nonfarm payrolls rose last month, the 36,000 gain was below historical averages, the Chicago Fed said, and that negatively impacted the CFNAI.
-By Michael McHugh, Dow Jones Newswires; (312)750-4142; michael.mchugh@
dowjones.com
(This story was originally published by Dow Jones Newswires)
Copyright (c) 2002 Dow Jones & Company, Inc.
All Rights Reserved
