Chicago Fed: US economy hit ‘brake’ in May

The US economy slowed significantly in May compared to the previous month, according to a report released by the Federal Reserve Bank of Chicago on Tuesday.

In particular, the Fed Chicago National Activity Index plunged 0.01 points from the revised level of 0.40 points in April.

The measurement was significantly worse than analysts’ expectations, which expected a slight slowdown in the index to 0.35 points, according to economists who took part in a FactSet poll.

The Central Bank of Chicago Index consists of 85 economic indicators from almost all business categories, which are divided into four broad categories: output and income, employment, unemployment and hours worked, personal consumption and housing, and sales, orders and inventories. A positive indicator of the indicator shows growth above the historical trend, while a negative measurement corresponds to growth below the trend.

The monthly performance of the four broad categories of the index was mixed, with two of them contributing positively and the other two acting as “weights”, according to the Fed.

The largest negative contribution to the index was in the category of personal consumption and housing, as it deducted 0.11 points in May, after the positive contribution of 0.10 points in the previous month.

Production indices also weighed on the index last month, as they contributed negatively by 0.01 points, compared to a contribution of 0.29 points in April. The decline is attributed to a 0.1% drop in manufacturing output in May.

In contrast, the employment index contributed positively to the index, by 0.08 points in May, to another indication of a strong labor market, after contributing 0.07 points last month.

On a quarterly basis, the Chicago Fed’s National Activity Index also fell but softer, to 0.20 in May from 0.40 a month earlier, indicating that the US economy continues to expand, albeit at a slower pace. compared to previous months.