Research >> Economics
Chicago Fed National Activity Points to Slower Economic Growth in May
|
Led by declines in production-related indicators, the Chicago Fed National Activity Index (CFNAI) fell to –0.15 in May from +0.42 in April. Two of the four broad categories of indicators that make up the index decreased from April, and two of the four categories made negative contributions to the index in May. The index’s three-month moving average, CFNAI-MA3, decreased to +0.18 in May from +0.48 in April.
The CFNAI Diffusion Index, which is also a three-month moving average, moved down to +0.10 in May from +0.23 in April. Thirty-nine of the 85 individual indicators made positive contributions to the CFNAI in May, while 46 made negative contributions. Forty-three indicators improved from April to May, while 42 indicators deteriorated. Of the indicators that improved, 17 made negative contributions.
Production-related indicators contributed –0.29 to the CFNAI in May, down from +0.33 in April. Manufacturing industrial production decreased 0.7 percent in May after increasing 0.6 percent in April. In contrast, the sales, orders, and inventories category made a contribution of +0.05 to the CFNAI in May, up from a neutral contribution in April. The Institute for Supply Management’s Manufacturing New Orders Index increased to 63.7 in May from 61.2 in April.
Employment-related indicators contributed +0.13 to the CFNAI in May, up slightly from +0.12 in April. Nonfarm payrolls rose by 223,000 in May after increasing by 159,000 in April. The contribution of the personal consumption and housing category to the CFNAI edged down to –0.04 in May from –0.03 in April. Housing permits decreased to 1,301,000 annualized units in May from 1,364,000 in April, but housing starts increased to 1,350,000 annualized units in May from 1,286,000 in the previous month.
The CFNAI was constructed using data available as of June 21, 2018. At that time, May data for 51 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 +0.42 from an initial estimate of +0.34, and the March monthly index value was revised to +0.26 from last month’s estimate of +0.32. 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 April and March monthly index values were primarily due to the former.
Posted: June 25, 2018 Monday 08:30 AM