Chicago Fed Index Signals Firmer Growth in June Reading

The Chicago Fed National Activity Index (CFNAI) rose to -0.02 in June from -0.19 in May.

The index, a weighted average of 85 monthly indicators, moved closer to zero -- the level that suggests the economy is growing at its historical trend rate. The May reading was revised slightly lower from an initial -0.15.

Three of the four broad categories improved in June. Production-related indicators led the uptick, with the category rising to +0.07 from -0.07 in May. Personal consumption and housing also contributed positively. The employment category slipped to -0.08 from -0.01, a small drag.

The three-month moving average, which smooths monthly volatility, edged up to -0.07 from -0.09. Readings above -0.70 have historically been associated with expanding economic activity.

A CFNAI reading of zero corresponds to trend GDP growth of roughly 2% annually. The June print, while still slightly negative, brings the index to its highest level since February.