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Chicago Fed National Activity Index, August 2003
CFNAI Indicates Economic Activity Improved Again in July
The Chicago Fed National Activity Index (CFNAI) was –0.20 in July, a small improvement
from the June reading of –0.32. The negative value for the index in July reflected continued
weakness in employment-related data; the contributions of other components of the CFNAI
netted to a small positive value. The three-month moving average index, CFNAI-MA3, improved
as well, from –0.59 in June to –0.29 in July. CFNAI-MA3 values below zero are associated
with below-trend economic growth. Accordingly, the CFNAI-MA3 value of –0.29 suggests
that growth in national economic activity continued to be below its historical trend in July.
The relatively large increase in the July CFNAI-MA3 reflects the fact that the three-month
average no longer includes the very low monthly reading recorded in April, –1.10, when
the economy was most severely influenced by the conflict in Iraq. With regard to inflation,
CFNAI-MA3 values below zero signal reduced inflationary pressures over the coming year.