Chicago Fed Activity Index Improves in May

Washington, DC, June 25, 2007-- The Chicago Fed said its National Activity Index was -0.22 in May against April's downwardly revised -0.30 reading. April was initially reported at -0.10.

Among the four broad categories comprising the index, each made negative contributions in May but employment, housing and sales segments improved in May from April.

The index's three-month moving average rose to -0.20 from -0.22 in April. It was previously reported at -0.16.   A reading below zero for the three-month average is associated with below-trend economic growth.

The Chicago Fed said the latest reading indicates little inflationary pressure over the coming year.

 Production indicators turned negative in May as industrial production was steady and capacity utilization inched lower.

Employment indicators were less negative, helped by solid payroll gains of 157,000 for May. Housing data was mixed, with higher permits balanced by lower starts.

In total, 26 of the index's 85 individual indicators made positive contributions in May and 59 made negative

contributions, the Chicago Fed said. Some 50 indicators improved in May from April while 34 deteriorated and one was stable.