US recovery looks in doubt as Fed activity index collapses

Ben Southwood
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US recovery faltered in August, according to the Chicago Fed’s national activity index released yesterday.

The headline indicator fell from minus 0.12 in July to minus 0.87 in August – below the minus 0.7 level that is consistent with weak recovery. Figures above zero indicate more robust growth.

The three-month moving average also slipped, down from minus 0.26 in July to minus 0.47 in August, implying that the slump may not be a short blip.

The other main index, which measures 85 different individual indicators, slipped to minus 0.23 from minus 0.08. This reflected an improvement in 29 indicators, and a worsening in 55 indicators – one was unchanged.

The biggest shift was in production-related indicators, which taken together collapsed from plus 0.08 in July to minus 0.58 in August.