By Xavier Fontdegloria

 

The U.S. economy continued to grow above-average in August, albeit at a slower pace compared with July, data from the Federal Reserve Bank of Chicago released Thursday showed.

The Chicago Fed National Activity Index fell to 0.29 in August from 0.75 in July, missing the 0.65 consensus by economists polled by FactSet.

The CFNAI index is composed of 85 economic indicators drawn from four broad categories of data: production and income; employment, unemployment and hours; personal consumption and housing; and sales, orders and inventories. A positive index reading corresponds to growth above trend and a negative index reading corresponds to growth below trend.

The CFNAI reading for August suggests a slowdown of economic activity in the month.

All four broad categories of indicators used to construct the index made positive contributions to it in August, but three categories worsened from the prior month, the Chicago Fed said.

Production-related indicators contributed by 0.11 to the CFNAI in August, down from 0.40 in July, as industrial production eased to 0.4% in August after rising 0.8% the previous month.

The contribution of the employment, unemployment and hours category to the CFNAI decreased to 0.12 from 0.38 the prior month as the path of job creation decreased significantly.

The contribution of the sales, orders and inventories category to the CFNAI fell to 0.03 in August from 0.07 in July.

The personal consumption and housing category contributed 0.03 points to the index, up from minus 0.09 in July, as personal consumption indicators broadly improved compared with the previous month.

The CFNAI diffusion index declined to 0.30 in August from 0.34 in July, while the index's three-month moving average, the CFNAI-MA3, rose to 0.43 from 0.36. Both the diffusion index and the CFNAI-MA3 signal that the U.S. economy is expanding.

 

Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com

-0- 

(END) Dow Jones Newswires

September 23, 2021 08:44 ET (12:44 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.