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Chicago Fed National Activity Index Suggests Economic Growth Picked Up in February
The data through February were unlikely to have been affected much by the COVID-19 outbreak. Economic data for March will be incorporated in the next CFNAI released on April 20, 2020.
Led by improvements in production-related indicators, the Chicago Fed National Activity Index (CFNAI) rose to +0.16 in February from –0.33 in January. Two of the four broad categories of indicators that make up the index increased from January, and three of the four categories made positive contributions to the index in February. The index’s three-month moving average, CFNAI-MA3, decreased to –0.21 in February from –0.11 in January.
The CFNAI Diffusion Index, which is also a three-month moving average, moved down to –0.20 in February from –0.11 in January. Forty-four of the 85 individual indicators made positive contributions to the CFNAI in February, while 41 made negative contributions. Forty-four indicators improved from January to February, while 40 indicators deteriorated and one was unchanged. Of the indicators that improved, 12 made negative contributions.
Production-related indicators contributed +0.11 to the CFNAI in February, up from –0.34 in January. Industrial production increased 0.6 percent in February after decreasing 0.5 percent in January. The contribution of the sales, orders, and inventories category to the CFNAI ticked down to –0.03 in February from –0.02 in January. The Institute for Supply Management’s Manufacturing New Orders Index moved down to 49.8 in February from 52.0 in the previous month.
Employment-related indicators contributed +0.05 to the CFNAI in February, up from +0.01 in January. The unemployment rate ticked down to 3.5 percent in February from 3.6 percent in the previous month. The contribution of the personal consumption and housing category to the CFNAI ticked down to +0.02 in February from +0.03 in January. Housing starts decreased to 1,599,000 annualized units in February from 1,624,000 in the previous month.
The CFNAI was constructed using data available as of March 19, 2020. At that time, February data for 51 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The January monthly index value was revised to –0.33 from an initial estimate of –0.25, and the December monthly index value was revised to –0.46 from last month’s estimate of –0.51. 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 January and December monthly index values were primarily due to the former.
Posted: March 23, 2020 Monday 08:30 AM