By Xavier Fontdegloria
U.S. economic growth remained sluggish for a second consecutive month, pointing to weakness at the end of the first quarter, data from the Federal Reserve Bank of Chicago showed Monday.
The Chicago Fed National Activity Index stood at minus 0.19 in March, unchanged from February, suggesting that U.S. economic activity grew below its average historical trend as the index came in below zero.
Economists polled by FactSet expected the index to fall to minus 0.25.
The CFNAI index, designed to gauge overall economic activity and inflationary pressures, is composed of 85 economic indicators from four broad categories of data: production and income; employment, unemployment and hours; personal consumption and housing; and sales, orders and inventories.
In March, only employment contributed positively to the index, and only slightly, while the data pointed to weakness elsewhere.
Employment-related indicators contributed a marginal 0.01 points to the index, swinging from minus 0.09 a month earlier, partly thanks to a lower unemployment rate in March.
Meanwhile, the personal consumption and housing category contributed minus 0.10 to the index, down from the minus 0.05 registered in February.
Production-related indicators also contributed negatively to the overall index in March, by minus 0.08 from 0.04 in February, as manufacturing output declined over the month.
The sales, orders and inventories category improved over the month, offsetting some of the deterioration seen in other categories. However, its contribution was still of minus 0.02 in March compared with minus 0.09 in the previous month.
The CFNAI diffusion index rose to 0.14 in March from 0.10 in February, while the index’s three-month moving average–the CFNAI-MA3–increased to 0.01 from minus 0.09.
These indicators suggest that the U.S. economy expanded in line with its historical trend in the first quarter as they are above the minus 0.35 and minus 0.70 values that, respectively, have historically been associated with economic growth.
Write to Xavier Fontdegloria at [email protected]
(END) Dow Jones Newswires
April 24, 2023 08:44 ET (12:44 GMT)
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