The Chicago Fed national activity index (CFNAI) is down to minus 0.34 in July after a downward revision to minus 0.09 in June. The July level is below the consensus of minus 0.15 in the Econoday survey of forecasters. Three of four categories made negative contributions in July, although only two were down from the prior month. Overall economic activity continues to struggle to retain upward momentum in July. However, it should be noted that Hurricane Beryl likely contributed to the weakness in production and that personal consumption and housing appears to be responding to an easing in financing conditions that has lowered mortgage rates.

Production-related indicators fell to minus 0.28 in July after minus 0.02 in June. Sales, orders, and inventories were only nominally higher at minus 0.01 in July after minus 0.02 in June. Employment-related indicators fell to minus 0.08 in July after minus 0.02 in June. Personal consumption and housing indicators were up to 0.03 in July after minus 0.02 in June.

The three-month moving average CFNAI in July is unchanged at minus 0.06 in July from June.

The national activity index is expected to fall to minus 0.15 in July versus plus 0.05 in a June report that saw all four main components decline from May.

The Chicago Fed National Activity Index (CFNAI) is a monthly index that tracks overall economic activity and inflationary pressures. The CFNAI is a weighted average of 85 existing monthly indicators of national economic activity. It is constructed to have an average value of zero and a standard deviation of one. Since economic activity tends toward trend growth over time, a positive index reading corresponds to growth above trend and a negative index reading corresponds to growth below trend.

This index is unique among regional Federal Reserve Bank indexes in that it is national in scope. Investors are eager to have insight into economic growth and inflation. This index combines 85 diverse and already released indicators from four broad categories -- production and income; employment, unemployment, and hours; personal consumption and housing; and sales, orders, and inventories -- into an overall index to measure economic performance. The index provides another measure with which investors can measure overall growth.