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Chicago Fed National Activity Index suggests economic growth declined in December 2021
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Led by declines in production-related indicators, the Chicago Fed National Activity Index (CFNAI) fell to –0.15 in December from +0.44 in November. Two of the four broad categories of indicators used to construct the index made negative contributions in December, and all four categories deteriorated from November. The index’s three-month moving average, CFNAI-MA3, moved down to +0.33 in December from +0.40 in November.
The CFNAI Diffusion Index, which is also a three-month moving average, edged down to +0.37 in December from +0.42 in November. Thirty-eight of the 85 individual indicators made positive contributions to the CFNAI in December, while 47 made negative contributions. Thirty-one indicators improved from November to December, while 54 indicators deteriorated. Of the indicators that improved, 13 made negative contributions.
Production-related indicators contributed –0.13 to the CFNAI in December, down from +0.25 in November. Manufacturing production decreased 0.3 percent in December after increasing 0.6 percent in November, and manufacturing capacity utilization moved down by 0.2 percentage points in December after increasing by 0.4 percentage points in the previous month. The contribution of the sales, orders, and inventories category to the CFNAI ticked down to +0.03 in December from +0.05 in November.
Employment-related indicators contributed +0.13 to the CFNAI in December, down slightly from +0.16 in November. Nonfarm payrolls moved up by 199,000 in December after increasing by 249,000 in November, but the unemployment rate decreased to 3.9 percent in December from 4.2 percent in the previous month. The contribution of the personal consumption and housing category to the CFNAI decreased to –0.19 in December from –0.02 in November.
The CFNAI was constructed using data available as of January 20, 2022. At that time, December data for 50 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The November monthly index value was revised to +0.44 from an initial estimate of +0.37, and the October monthly index value was revised to +0.70 from last month’s estimate of +0.75. 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 revisions to both the November and October monthly index values were primarily due to the former.
Posted: January 24, 2022 Monday 08:30 AM