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Chicago Fed National Activity Index Suggests Growth Fell Substantially in April
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Led by declines in production- and employment-related indicators, the Chicago Fed National Activity Index (CFNAI) fell to –16.74 in April from –4.97 in March. All four broad categories of indicators used to construct the index made negative contributions in April, and all four categories decreased from March. The index’s three-month moving average, CFNAI-MA3, decreased to –7.22 in April from –1.69 in March. Following a period of economic expansion, an increasing likelihood of a recession has historically been associated with a CFNAI-MA3 value below –0.70.
The CFNAI Diffusion Index, which is also a three-month moving average, moved down to –0.55 in April from –0.32 in March. Six of the 85 individual indicators made positive contributions to the CFNAI in April, while 79 made negative contributions. Sixteen indicators improved from March to April, while 69 indicators deteriorated. Of the indicators that improved, 12 made negative contributions.
Production-related indicators contributed –5.63 to the CFNAI in April, down from –2.31 in March. Industrial production declined 11.2 percent in April after decreasing 4.5 percent in March. The contribution of the sales, orders, and inventories category to the CFNAI decreased to –1.24 in April from –0.81 in March.
The CFNAI was constructed using data available as of May 21, 2020. At that time, April data for 51 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The March monthly index value was revised to –4.97 from an initial estimate of –4.19, and the February monthly index value was revised to +0.05 from last month’s estimate of +0.06. 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 March monthly index value was primarily due to the latter, while the revision to the February monthly index value was primarily due to the former. In addition, this month we made further changes to the way we impute missing values and adjust for outliers; for more details, see p. 7 of the background information document at chicagofed.org/cfnai.
Employment-related indicators contributed –9.06 to the CFNAI in April, down from –1.06 in March. Nonfarm payrolls fell by 20,537,000 in April after decreasing by 881,000 in March, and the unemployment rate increased to 14.7 percent in April from 4.4 percent in the previous month. The contribution of the personal consumption and housing category to the CFNAI ticked down to –0.81 in April from –0.80 in March.
Posted: May 26, 2020 Tuesday 08:30 AM