Jobs, Housing Lower Chicago Fed Econ Gauge

Chicago, IL, August 20, 2007--The Federal Reserve Bank of Chicago said its gauge of the national economy was lower in July, hurt by weakness in employment and housing indicators.

The Chicago Fed said its National Activity Index was -0.10 for July against June's downwardly revised +0.06 reading.

June was initially reported at +0.11. Among the four broad categories comprising the index, one made positive contributions, two were negative and one was neutral.

The index's three-month moving average was held at -0.12, the same as June's upwardly revised reading, previously reported at -0.15. A reading below zero for the three-month average is associated with below-trend economic growth. The index has been below zero since September 2006, but the matching June and July readings are the highest so far in 2007. 

Employment-related indicators made a bigger negative contribution for the month as payroll employment expanded less than expected and the jobless rate rose. Housing indicators were hit by a drop in housing permits and building permits.

Production indicators were positive on the back of a 0.3-% increase in industrial production and higher capacity utilization. Of the 85 individual indicators tracked for the index, 42 made positive contributions in July and 43 were negative, the Chicago Fed said.