The Chicago Federal Reserve warned Monday that economic activity slowed in August in a possible worrisome sign for the rest of the nation.

The Chicago Fed's National Activity Index fell to negative 0.21 percent in August, following a 0.39 percent increase in the previous month. Any figure above zero indicates the economy is expanding faster than its traditional rate of growth. The consensus reading from Bloomberg was 0.35 for August.

The three-month average fell 0.07 percent, from a 0.20 percent increase in July, while employment-related indicators made a neutral contribution, down from +0.10 in July.

The biggest drag came from production-related indicators, as manufacturing production fell 0.4 percent and manufacturing capacity utilization declined in August, the Chicago Fed said.

The index, which is a weighted average of 85 different economic indicators, is designed so that negative values indicate below-average growth and positive values indicate above-average growth. Forty-two indicators improved from July to August, while 43 indicators deteriorated, the report said.