By Xavier Fontdegloria

The U.S. economy grew in February at a pace below its historical average, dragged by sluggish manufacturing production and consumption, according to data from the Federal Reserve Bank of Chicago published Thursday.

The Chicago Fed National Activity Index declined to minus 0.19 in February from 0.23 in January. Any reading below zero suggests U.S. economic activity grew below its average historical trend over the month.

The CFNAI index, designed to gauge overall economic activity and inflationary pressures, is composed of 85 economic indicators from four broad categories of data: production and income; employment, unemployment and hours; personal consumption and housing; and sales, orders and inventories.

All four broad categories of indicators used to construct the index made negative contributions in February, the report said.

Production-related indicators contributed minus 0.08 to the index in February, down from 0.15 a month earlier, as manufacturing output grew only marginally.

The personal consumption and housing category also contributed by minus 0.08 to the index, swinging from 0.10 in January.

Employment-related indicators contributed by minus 0.02 from 0.10 the previous month as job creation slowed and the unemployment rate edged up.

The contribution of the sales, orders, and inventories category edged up to minus 0.02 from minus 0.12 but was still negative, the data showed.

The CFNAI diffusion index rose to 0.02 in February from minus 0.07 in January. The index's three-month moving average, the CFNAI-MA3, increased to minus 0.13 from minus 0.27.

The indicators suggest that the U.S. economy expanded in the quarter to February as they are above the minus 0.35 and minus 0.70 values that, respectively, have historically been associated with economic growth.

Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com

(END) Dow Jones Newswires

March 23, 2023 08:44 ET (12:44 GMT)