National economic activity slowed in May as subdued inflationary pressure and the anemic housing recovery held back the U.S. economy, the Chicago Fed said in its national activity index.

The Fed's National Activity Index fell to -0.45 in May, from 0.08 in April. Economic activity above zero generally means growth, while any index score under zero suggests a declining economy. Most of the decline was attributed to production-related indicators.

The index checks up on the national health of the American economy by surveying 85 different indicators from four broad categories, including production and income, employment and unemployment, personal consumption and housing, as well as sales, orders and inventory.

Three of the four broad categories saw their index scores fall from April to May. Real estate — often the first thing to come back after a recession — remains a particular challenge for the U.S. economy at large.

The consumption and housing category had a negative effect on the index, with activity levels edging down from -0.24 in April to -0.25 in May. Meanwhile, housing starts fell from 744,000 in April to 708,000 in May. At the same time, housing permits rose from 723,000 in April to 780,000 in May.

kpanchuk@housingwire.com