Chicago Fed report shows housing still a drag on economy

The Federal Reserve Bank of Chicago said its national activity index, which reflects inflationary pressures and economic growth, remained in positive territory in January for the second straight month, while housing issues continue to stifle overall growth.

The survey gives a score of zero and above when the economy is expanding, while negative values show a decline in growth. Overall, the index fell to 0.22 in January from 0.54 in December, indicating the economy is growing but at a slower pace.

Data from consumption and housing contributed a negative 0.27 to the January index, narrower than negative 0.3 in December and suggesting housing still remains a drag on the overall economy.

Out of all the categories measured to gauge economic activity — housing, consumption, production, income, employment, sales, orders and inventory — only housing and consumption had negative growth index scores in January.

Recent jobs reports are generally more optimistic than housing forecasts.

The Labor Department recently said the seasonally adjusted figure of initial job claims for the week ending Feb. 11 declined to 348,000, down from 361,000 the previous week.

In addition, the Bureau of Labor Statistics said in February that jobless rates fell in 329 of the nation’s 372 metro areas in December.

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