The Federal Reserve Bank of Chicago releases a national activity index each month, and it is indicating that economic growth managed to increase slightly in the month of June. Thursday’s report showed that the Chicago Fed National Activity Index (CFNAI) was +0.08 in June versus –0.08 in May.

The CFNAI was constructed using data available as of July 20, 2015. Above zero represents growth, and below zero is contraction.

June’s CFNAI was led by improvements in production and in employment related indicators. Three of the four broad categories of indicators that make up the index increased from May. Also, two of the four categories were shown to have made positive contributions to the index in June.

The Fed has unsuccessfully been targeting 2.0% to 2.5% for inflation. Unfortunately, the economic growth reflected limited inflationary pressure from economic activity over the coming year.

Of the 85 individual indicators, 48 made positive contributions to the CFNAI in June, while 37 made negative contributions. Forty-four indicators improved from May to June, while 40 indicators deteriorated and one was unchanged. Of the indicators that improved, 13 made negative contributions.

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Additional data was shown as follows:

• Personal consumption and housing-related indicators contributed –0.07 to the CFNAI in June, down slightly from –0.05 in May. Consumption indicators, on balance, deteriorated, pushing the category’s contribution lower.
• The contribution from employment-related indicators to the CFNAI increased to +0.12 in June from +0.06 in May.

The CFNAI index is a weighted average of 85 indicators of national economic activity drawn from four broad categories of data: 1) production and income; 2) employment, unemployment and hours; 3) personal consumption and housing; and 4) sales, orders and inventories.

Investors might want to consider that the national index rarely moves the market. One of the reasons for a muted reaction to this report is that much of the data inside the release has already been seen. Still, a measurement of 85 different factors aims to give a broader representation of the national economy.

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