By Trang Nguyen, THETAKEAWAY: March Chicago FedNational Activity Index Fell Back to Negative Territory > Below-Trend Growthand Lessening Pressures on Inflation > USDTumble vs. Most of its Major Peers The Chicago Fed National Activity Index, aweighted average of 85 economic indicators, deteriorated to minus 0.29 in March from a revised 0.07 in February , Federal Reserve Bank of Chicago reported today. A negative print indicated a below-trend growth and lessening pressures onfuture inflation last month . The February index was upwardly revised to 0.07 from an initial estimate of minus 0. 09 . The three-month average, which provides a moreconsistent picture of national economic growth, plunged to 0.05 from February’s 0.37 . Though disappointingly falling back a negative territory for the first time in four months , three-month average figure has not signaled a possible recession in thenear future. 85 economic indicators that constructed theChicago Fed national index were drawn from four broad categories of data:1) production and income; 2) employment, unemployment and hours; 3)personal consumption and housing; and 4) sales, orders andinventories. March negative reading was a result of deteriorationin all four broad categories of indicator. Production-related indicators made a negative contribution of 0.13 to March ’s reading with 0.2 percent loss in manufacturing production and no improvement in industrial production . Consumption and housing sector continued to slip to minus 0.28 from minus 0. 24 in the previous month , in which rise in housing permits partly offset decline in housing starts . Sales, orders a nd inventories category add 0.03 to the index last month after contributing 0.0 4 in February. In contrast, the unemployment ratedeclined from 8.3 percent in February to 8.2 percent in March andaverage weekly initial claims for unemployment insurance reached afour-year low. USDJPY 1-minute Chart: April 26 ,2012 Chart createdusing Strategy Trader – Preparedby Trang Nguyen The U.S. dollar loses ground versus most of itsmajor trading partner except its Canadian counterpart for thesecond day due to lingering effect from
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