WASHINGTON – The U.S. economy was ``quite weak'' and performed below trend for the 15th straight month in September, the Federal Reserve Bank of Chicago said on Monday.
The Chicago Fed said its monthly National Activity Index inched up to -1.28 in September from -1.30 in August. The three-month moving average, considered a more reliable gauge since it smooths out monthly fluctuations, was -0.95 in September, up from -1.02 in August.
It was the 15th straight month that the three-month average was below zero, which the Chicago Fed said suggested economic activity has been growing below trend for more than a year.
The regional Fed bank also said three-month averages of below -0.70 suggest an increased likelihood that a recession, which is commonly defined as two straight quarters of contraction, has begun. However, the Chicago Fed noted that in each of the five recessions since 1967, the year the index measures back to, the three-month average fell below -1.50.
``While the September index depicts a national economy that was quite weak, the CFNAI-MA3 (three-month average) was not contracting at a typical recessionary rate,'' the Chicago Fed said in a statement.
Many economists believe the fragile U.S. economy tipped into a recession following the attacks in New York and in Washington on Sept. 11. That opinion gained strength on Friday, when the Labor Department reported the U.S. economy shed 415,000 jobs in October, the biggest monthly decline in more than two decades. The unemployment rate shot up to 5.4 percent from 4.9 percent in September.
The Chicago Fed index is based on 85 economic indicators that cover areas including production, income, employment, consumption, housing and manufacturing. Sixty-eight of the 85 indicators showed below-average growth in September, the Chicago Fed said.
In September 2000, the monthly index was -0.06 while the three-month moving average was -0.28.