Chicago Fed National Activity Index Weak In May

May was a weak month based on the minus 0.51 result for the national activity index, one that drives the 3-month average to a minus 0.36 level consistent with below average growth.

Production, not employment, is by far the weakest component in May, at minus 0.32 and reflecting weakness in industrial production and factory utilization. Employment, despite the very weak 38,000 total for nonfarm payrolls, fell only slightly, to minus 0.09 from minus 0.06 getting a lift from the month's 3 tenths drop in the unemployment rate (a drop however tied to a fall in participation and one widely considered a sign of weakness, not strength). The sales/orders/inventories component fell slightly to minus 0.01 while personal consumption & housing, despite isolated bursts of strength in related indicators, fell to minus 0.09 from minus 0.02.