Chicago Fed National Activity Index Steady And Soft

Judging by the national activity index, a Federal Reserve rate cut not would seem to pose much risk of economic overheating. The index held steady and very soft at minus 0.02 with the 3-month average, however, noticeably underwater at minus 0.26. A score of zero indicates historically average economic growth.

June's 224,000 jump in nonfarm payrolls gave only limited lift to the employment component which contributed just 0.06 to the index. Yet this is the only component which pulled its own weight in the month with the other three all flat to negative: production unchanged; sales, orders & inventories minus 0.03; and personal consumption & housing minus 0.05. This index is a giant cocktail of 85 different indicators with June so far including 51, yet the trend all year has been flat to negative.