Chicago Fed Activity Index Declines

Chicago, IL, September 24, 2007--The Federal Reserve Bank of Chicago on Monday said its gauge of the national economy was down sharply in August, hurt by weakness in production and employment indicators.

The index's three-month moving average also fell, which the Fed said suggests little inflationary pressure over the next year.

Production indicators turned negative in August as factory output fell by 0.2% and capacity utilization fell. Employment indicators had a significant negative impact, hurt by the 4,000 decrease in non-farm payroll employment.

Consumption and housing indicators were also more negative in August as both housing permits and housing starts continued to decline.