US Economy Helped by Factories in Late Summer
CHICAGO—A measure of the U.S. economy from the Chicago Federal Reserve steadied in August, due to a modest ramping up of output at the nation’s factories compared to earlier in the summer. The Chicago Fed’s index of national economic activity registered at a positive 0.18 last month, unchanged from a slightly upwardly revised July reading.
The volatile nature of the monthly reading puts added emphasis on following the index’s less-volatile, three-month moving average. It rose to positive 0.24 in August from a downwardly revised positive 0.02 in July.
The Chicago Fed index is a weighted average of 85 economic indicators, designed so that zero represents trend growth and a three-month average below negative 0.70 suggests a recession is underway. Forty-eight of the 85 individual indicators made positive contributions in August, while 37 made negative contributions. Fifty-four indicators improved from July to August, while 30 indicators deteriorated and one was unchanged.
Production-related indicators, meaning factories, contributed a positive 0.16 in August, from a positive 0.10 in July. The reading reflects the results of the latest Institute for Supply Management’s manufacturing production index, which increased to 63.3 in August from 58.5 in July, to mark the fastest pace in 14 years. That report’s new-orders index increased to 65.1 in August from 60.2 in July.