The Chicago Fed national activity index (CFNAI) for July continues to signal tepid expansion from the third month in a row after briefly dipping into contractionary territory in April. For the past three months the CFNAI has been little changed. It seems to have moved past some of the volatility brought on by unsettled trade and tariff policies and unease about job security. The CFNAI three-month moving average (CFNAI-MA3) continues to signal mildly expansionary conditions.

The Chicago Fed says, Periods of economic expansion have historically been associated with values of the CFNAI-MA3 above 0.70 and the CFNAI Diffusion Index above 0.35. Conversely, periods of economic contraction have historically been associated with values of the CFNAI-MA3 below 0.70 and the CFNAI Diffusion Index below 0.35."

The CFNAI is down to minus 0.19 in July after minus 0.18 in June. The four broad categories of indicators that make up the index show 1 positive and 3 negative contributions in July. Among the categories 3 increased and 1 decreased.

Production-related indicators are down to minus 0.10 in July after positive 0.01 in June. Sales, orders, and inventories are up to minus 0.02 in July after minus 0.10 in the prior month. Employment-related indicators are up to minus 0.06 in July after minus 0.08 in June. Indicators for personal consumption and housing are up to positive 0.00 in July after minus 0.01 one month ago.

The three-month moving average CFNAI in July is minus 0.18 compared to minus 0.26 in the prior month.

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.