(Adds background, index details)
NEW YORK Nov 23 The Federal Reserve Bank of
Chicago said on Monday its gauge of the national economy fell
further into negative territory in October, in a report that
suggested the economic recovery could be in trouble.
The Chicago Fed said its National Activity Index slid to
-1.08 from a revised -1.01 in September. September's reading
was originally reported at -0.81.
The index's three-month moving average, CFNAI-MA3,
decreased to -0.91 in October from -0.67 in September,
declining for the first time in 2009, the Chicago Fed said.
"October's CFNAI-MA3 suggests that growth in national
economic activity remained below its historical trend," the
The Chicago Fed said that a move below -0.70 in the index's
three-month moving average following a period of economic
expansion indicates an increasing likelihood that a recession
The report appears to highlight the fragile state of the
economy, which only started growing again in the third quarter
this year following the worst slump in decades.
The Chicago Fed's report also said the amount of economic
slack reflected in the three-month moving average "indicates
low inflationary pressure from economic activity over the
The 85 economic indicators that comprise the Chicago Fed's
index are drawn from four categories: production and income;
employment, unemployment and hours; personal consumption and
housing; and sales, orders and inventories.
Thirty-two of the 85 individual indicators made positive
contributions to the index in October, and 53 made negative
contributions. Forty-three indicators improved from September
to October, while 42 indicators deteriorated.
Values of zero in the National Activity Index indicate a
national economy expanding at historical trends, negative
values indicate below-trend growth and positive values signal
growth above trend, the Chicago Fed said.
Financial markets showed little reaction to the report.
(Reporting by Burton Frierson; Editing by Padraic Cassidy)
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