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NEW YORK, Nov 23 (Reuters) - 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 report said.
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 has begun.
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 coming year.”
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) ((email@example.com;+1 646-223-6292; Reuters Messaging: firstname.lastname@example.org))