The Chicago Federal Reserve Bank’s National Activity Index (NAI) showed an increase from -0.23 in June to -0.15 in July. This was the fifth consecutive month with an index reading below zero. Negative numbers indicate that the U.S. economy is growing below its historical trend, and when the 3-month moving average falls below -0.70, the risk of recession is increased.
Manufacturing production declined 0.1% in July, while housing continued to reduce the index because residential activity remains below its potential. In July, both housing starts and permits were higher than the month before, but higher mortgage rates have dampened growth rates somewhat.