The July Chicago Fed National Activity Index (CFNAI) dropped to -0.08, down from a sharply upwardly revised +0.06 in June.
This came in lower than the Bloomberg survey economic consensus, which had projected a milder softening to -0.05. Because the index is zero-centered, a negative reading indicates that the U.S. economy grew at a slower pace than its historical baseline trend.
The primary driver of the contraction was a steep drop in personal spending and real estate metrics. Out of the 85 individual economic indicators tracked, 45 made negative contributions while 40 were positive.
📊 July Component Breakdown
Three out of the four major economic categories pulled down the overall index relative to June's performance:
- Personal Consumption & Housing: Slid to -0.09 (from +0.04 in June). A severe downward swing in housing and retail data led the monthly decline.
- Production & Income: Eased to +0.01 (from +0.04 in June). Industrial output and factory capacity numbers expanded at a slower pace.
- Sales, Orders, & Inventories: Edged down to +0.02 (from +0.04 in June). Corporate demand and warehousing numbers cooled slightly.
- Employment, Unemployment, & Hours: Improved to -0.01 (from -0.05 in June). This category provided the only positive momentum offset.
📉 Long-Term Growth Multipliers
To smooth out month-to-month volatility, the Federal Reserve evaluates moving averages and diffusion metrics:
Despite the pullbacks, the Federal Reserve Bank of Chicago baseline notes that the three-month average remains well above the -0.70 threshold historically required to signal a recession. You can view the full historical breakdown or pull raw code packages directly from the official St. Louis Fed (FRED) Portal.
Comment bellow if you would like me to map out how this downside surprise is impacting U.S. Treasury yields or S&P 500 futures today?
Add comment
Comments