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Chicago Fed National Activity Index lower in September
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The Chicago Fed National Activity Index was –0.81 in September, down from –0.65 in August. Three of the four broad categories of indicators made negative contributions to the index in September, but the production and income category made a positive contribution for the third consecutive month.
At –0.63 in September (up from –0.96 in the previous month), the index’s three-month moving average, CFNAI-MA3, suggests that growth in national economic activity was below its historical trend. However, the CFNAI-MA3 in September improved to a level greater than –0.7 for the first time since the early months of this recession. For the four previous recessions, the first month when the CFNAI-MA3 was above –0.7 coincided closely with the end of each recession as eventually determined by the National Bureau of Economic Research. With regard to inflation, the amount of economic slack reflected in the CFNAI-MA3 indicates low inflationary pressure from economic activity over the coming year.
Production-related indicators made a smaller positive contribution of +0.27 to the index in September compared with +0.49 in August. Manufacturing production increased 0.8 percent in September after rising 1.2 percent in August, and manufacturing capacity utilization increased to 67.5 percent in September from 66.8 percent in the previous month.
Posted: October 26, 2009 Monday 08:30 AM