Chicago, IL, August 23, 2006--The Federal Reserve Bank of Chicago on Wednesday said its gauge of the national economy fell in July, hurt by weakness in employment indicators.
The Chicago Fed said its National Activity Index fell to -0.12 in July from an upwardly revised 0.43 (from 0.34) in June. It was the second negative reading in three months.
The three-month moving average of the index slipped in July to 0.07 from an upwardly revised 0.15 (from 0.11) in June.
Still, any reading above zero for the three-month average suggests economic growth is above its historical trend, and the Chicago Fed said the current value shows potential inflationary pressures over the next year.
Employment indicators slipped as the U.S. unemployment rate rose to 4.8 percent from 4.6 percent and July's non-farm payroll growth fell to 113,000 in July from 124,000.
Production-related indicators made a much smaller positive contribution in July than June as industrial production rose at a slower pace.
Consumption and housing indicators stayed positive even as housing starts and building permits fell as both measures stayed above historical norms. Sales, orders and inventories came in at a neutral level.
Overall, 34 of the 85 individual indicators tracked by the Chicago Fed made positive contributions in July while 50 made negative contributions and one was neutral.
