The numbers: The Chicago Fed’s national activity index fell to 1.18 in July from a revised record-high of 5.33 in June. The index’s three-month moving average, which tries to smooth out volatility, rose into positive territory – moving up to 3.59 from negative 2.78 in the prior month.
A zero value of the index indicates the national economy is expanding at its historic trend rate of growth.
The June index was revised from an initial estimate of 4.11. The May index was revised to 4.24 from 3.50.
What happened: The Chicago Fed index is a weighted average of 85 economic indicators. Fifty-six made positive contributions in July. Still, 60 indicators deteriorated from June’s level.
Production-related indicators contributed 1.09 to the overall index in July, down from 2.21 in the prior month. Employment-related indicators added 0.38, down from 1.94 in June.
Big picture: Economists think the economy has had its initial sharp rebound from the lows of April and May and are worried that growth will move sideways from here.
Market reaction: Futures indicated that stocks would open higher on Monday on optimism about potential coronavirus treatments.
Video: Stocks point to a higher open as the market looks to extend record-setting rally (CNBC)