Research >> Economics
Chicago Fed National Activity slowed in May
The index’s three-month moving average, CFNAI-MA3, decreased to –0.36 in May from –0.25 in April. May’s CFNAI-MA3 suggests that growth in national economic activity was somewhat below its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests subdued inflationary pressure from economic activity over the coming year.
The CFNAI Diffusion Index, which is also a three-month moving average, moved down to –0.30 in May from –0.23 in April. Twenty-eight of the 85 individual indicators made positive contributions to the CFNAI in May, while 57 made negative contributions. Twenty-eight indicators improved from April to May, while 56 indicators deteriorated and one was unchanged. Of the indicators that improved, 12 made negative contributions.
The contribution from production-related indicators to the CFNAI fell to –0.32 in May from +0.13 in April. Manufacturing industrial production declined by 0.4 percent in May after increasing by 0.2 percent in April, and manufacturing capacity utilization declined to 74.8 percent in May from 75.2 percent in the previous month. In contrast, the sales, orders, and inventories category made a contribution of –0.01 to the CFNAI in May, down only slightly from a neutral contribution in April.
The contribution from employment-related indicators to the CFNAI edged down to –0.09 in May from –0.06 in April. Nonfarm payrolls increased by only 38,000 in May after rising by 123,000 in the previous month. However, the civilian unemployment rate fell to 4.7 percent in May from 5.0 percent in April. The contribution of the personal consumption and housing category to the CFNAI decreased to –0.09 in May from –0.02 in April.
Housing starts moved down to 1,164,000 annualized units in May from 1,167,000 in April, but housing permits moved up to 1,138,000 annualized units in May from 1,130,000 in the previous month.
The CFNAI was constructed using data available as of June 17, 2016. At that time, May data for 50 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The April monthly index value was revised to +0.05 from an initial estimate of +0.10, and the March monthly index value was revised to –0.64 from last month’s estimate of –0.55. Revisions to the monthly index value 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 April and March monthly index values were due primarily to the former.
Posted: June 23, 2016 Thursday 08:30 AM