By Xavier Fontdegloria
The U.S. economy grew in December below its historical average rate for a second straight month, data from the Federal Reserve Bank of Chicago showed Thursday, adding to increasing evidence that the economic slowdown broadened at year-end.
The Chicago Fed National Activity Index came in at minus 0.49 in December, broadly unchanged from minus 0.51 in November. A negative value for the monthly index is associated with the economy growing below its average trend.
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.
Production-related indicators were the main driver of lower economic growth, according to the data. These contributed by minus 0.43 to the overall index as industrial production fell 0.7% in December.
Personal consumption and housing indicators also contributed negatively to the index, by minus 0.07 in December from minus 0.05 in November.
The contribution of sales, orders and inventories also was negative, by a marginal 0.01, though improving from the minus 0.07 a month earlier.
The only broad category which contributed positively to the index was employment. these indicators supported the index by 0.02, swinging from a minus 0.03 a month earlier.
The CFNAI diffusion index fell to minus 0.13 in December from zero in November, while the index's three-month moving average, the CFNAI-MA3, decreased to minus 0.33 from minus 0.14.
The indexes still signal the U.S. economy expanded in the last quarter of the year as they are above the minus 0.35 and minus 0.70 values that, respectively, have been associated with periods of economic growth. However, the indexes also suggest economic growth deteriorated rapidly at year-end.
Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com
(END) Dow Jones Newswires
01-26-23 0844ET
