According to data from the Federal Reserve Bank of Chicago, U.S. economic growth slowed in August as industrial activity moderated. The Chicago Fed National Activity Index (CFNAI) dropped to minus 0.16 in August from a revised 0.07 in July, indicating that economic activity expanded at a slower rate compared to its historical trend. The CFNAI index, which measures overall economic activity and inflationary pressures, consists of 85 economic indicators across four categories: production and income, employment, personal consumption and housing, and sales and inventories. 

In August, all four categories contributed to the decline in the index, although to varying degrees. Production-related indicators saw the most significant contraction, reflecting a slowdown in industrial production growth. Personal-consumption and housing indicators also declined, while employment-related indicators remained unchanged and sales indicators showed slight improvement. The CFNAI diffusion index, which shows how the monthly index change is spread across the 85 indicators over three months, weakened slightly in August. However, the index’s headline three-month moving average increased marginally. Both indicators suggest that the U.S. economy expanded in August, as they are above the historical values associated with economic growth.

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