Index rises to 2.61 from negative 17.89, suggesting a substantial increase in growth
The numbers:The Chicago Fed’s national activity index recovered to a 2.61 in May from negative 17.89 in the prior month. The index’s three-month moving average moved up to negative 6.65 from negative 7.5 in April.
What happened: The Chicago Fed index is a weighted average of 85 economic indicators. Seventy-two indicators improved in May with 13 deteriorated.
A zero value for the index indicates the national economy is expanding at its historical trend rate of growth.
Big picture: While return of growth in May is good news. economists caution not to put too much weight on it. They say the May data just shows that the lights are back on for the economy and doesn’t contain much information about the likely path of the economy over the last six months of the year.
Market reaction: Meanwhile, the Dow Jones Industrial Average
was up 1% last week, but set to see lackluster trade on Monday.