NEW YORK (Reuters) - U.S. economic activity picked up pace last month as gauges of production and personal consumption improved, according to the Federal Reserve Bank of Chicago on Thursday.
The bank’s National Activity Index rose to 0.12 in July, an increase from June's -0.33. The figure, comprising four broad categories, indicates activity expanding at its swiftest since January.
While two of the four categories edged up in July, employment and sales were modest drags.
The index's three-month moving average, which the bank said provides a more consistent picture of national economic growth, ticked up to -0.13 from -0.15. Readings of the three-month average that are above -0.70 have historically been associated with economic expansion.
The Chicago Fed reading dovetails with other recent readings of improved industrial production in July. Last week the Fed reported overall industrial production rose 1.0% last month, driven by increased motor vehicle output.
The bank’s figure tracks with indications that U.S. gross domestic product growth picked up as the third quarter began. The Federal Reserve Bank of Atlanta's GDP Now tool on Thursday indicated growth was tracking at a 5.9% annualized rate.
Fears of a coming recession had been fueled by the Fed's high interest rates aimed at reducing inflation. Inflation has cooled and the Fed is nearing the end of its tightening cycle, raising optimism that the U.S. economy will be steered into a “soft landing” scenario.