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Chicago Fed National Activity points to slower economic growth in July
Led by declines in production-related indicators, the Chicago Fed National Activity Index (CFNAI) fell to –0.36 in July from +0.03 in June. All four broad categories of indicators that make up the index decreased from June, and all four categories made negative contributions to the index in July. The index’s three-month moving average, CFNAI-MA3, moved up to –0.14 in July from –0.30 in June.
The CFNAI Diffusion Index, which is also a three-month moving average, edged down to –0.19 in July from –0.15 in June. Twenty-six of the 85 individual indicators made positive contributions to the CFNAI in July, while 59 made negative contributions. Thirty indicators improved from June to July, while 54 indicators deteriorated and one was unchanged. Of the indicators that improved, 14 made negative contributions.
Production-related indicators contributed –0.25 to the CFNAI in July, down from +0.09 in June. Total industrial production decreased 0.2 percent in July after increasing 0.2 percent in June, and manufacturing production decreased 0.4 percent in July after rising 0.6 percent in the previous month. The contribution of the sales, orders, and inventories category to the CFNAI decreased to –0.05 in July from –0.01 in June.
Employment-related indicators contributed –0.01 to the CFNAI in July, down slightly from a neutral value in June. Total nonfarm payrolls increased by 164,000 in July after rising by 193,000 in the previous month. The contribution of the personal consumption and housing category to the CFNAI ticked down to –0.06 in July from –0.05 in June.
The CFNAI was constructed using data available as of August 22, 2019. At that time, July data for 51 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The June monthly index value was revised to +0.03 from an initial estimate of –0.02, and the May monthly index value was revised to –0.10 from last month’s estimate of –0.03. Revisions to the monthly index can be attributed to two main factors: revisions in previously published data and differences between the estimates of previously unavailable data and subsequently published data. The revision to the June monthly index value was primarily due to the former, while the revision to the May monthly index value was primarily due to the latter.
Posted: August 26, 2019 Monday 08:30 AM