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Chicago Fed National Activity Index Points to Further Slower Economic Growth in October
Led by declines in production-related indicators, the Chicago Fed National Activity Index (CFNAI) fell to –0.71 in October from –0.45 in September. Two of the four broad categories of indicators that make up the index decreased from September, and all four categories made negative contributions to the index in October. The index’s three-month moving average, CFNAI-MA3, moved down to –0.31 in October from –0.21 in September.
The CFNAI Diffusion Index, which is also a three-month moving average, edged up to –0.22 in October from –0.24 in September. Twenty-seven of the 85 individual indicators made positive contributions to the CFNAI in October, while 58 made negative contributions. Thirty-four indicators improved from September to October, while 49 indicators deteriorated and two were unchanged. Of the indicators that improved, 20 made negative contributions.
Production-related indicators contributed –0.55 to the CFNAI in October, down from –0.36 in September. Total industrial production fell 0.8 percent in October after decreasing 0.3 percent in September. The contribution of the sales, orders, and inventories category to the CFNAI ticked up to –0.03 in October from –0.04 in September.
Employment-related indicators contributed –0.10 to the CFNAI in October, down from +0.01 in September. Total nonfarm payrolls increased by 128,000 in October after rising by 180,000 in September, and the unemployment rate ticked up to 3.6 percent in October from 3.5 percent in the previous month. The contribution of the personal consumption and housing category to the CFNAI edged up to –0.03 in October from –0.05 in September. Housing starts increased to 1,314,000 annualized units in October from 1,266,000 in September.
The CFNAI was constructed using data available as of November 21, 2019. At that time, October data for 51 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. There was no revision to the September monthly index value, but the August monthly index value was revised to +0.23 from last month’s estimate of +0.15. 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 August monthly index value was primarily due to the former.
Posted: November 25, 2019 Monday 08:30 AM