Europe and IMF reach Greek deal, Chicago Fed index falls below level at start of last recession

Reuters reports a positive development in the eurozone sovereign debt crisis.

Euro zone finance ministers and the International Monetary Fund clinched agreement on a new debt target for Greece on Monday in a breakthrough towards releasing an urgently needed tranche of loans to the near-bankrupt economy, officials said.

After nearly 10 hours of talks at their third meeting on the issue in as many weeks, Greece's international lenders agreed to reduce Greek debt by 40 billion euros, cutting it to 124 percent of gross domestic product by 2020, via a package of steps.

Economic data from the US on Monday were not as positive.

The Chicago Federal Reserve reported on Monday that its National Activity Index decreased to -0.56 in October from 0.00 in September. The index’s three-month moving average decreased from -0.36 in September to -0.56 in October.

According to the Chicago Fed, October’s three-month average suggests that economic growth was below its historical trend. Indeed, the October reading was the lowest since November 2009 and lower than when the economy last entered recession in December 2007.

Production-related indicators contributed -0.45 to the index in October, down from -0.06 in September. The Chicago Fed said that Hurricane Sandy negatively affected industrial production in October.