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Chicago Fed National Activity shows growth slowed in January
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Led by declines in production-related indicators, the Chicago Fed National Activity Index (CFNAI) decreased to –0.39 in January from –0.03 in December. Two of the four broad categories of indicators that make up the index decreased from December, and two of the four categories made negative contributions to the
index in January.
The index’s three-month moving average, CFNAI-MA3, decreased to +0.10 in January from +0.26 in December, marking its fifth consecutive reading above zero. January’s CFNAI-MA3 suggests that growth in national economic activity was above its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests limited inflationary pressure from economic activity over the coming year.
The CFNAI Diffusion Index decreased to +0.11 in January from +0.28 in December. Forty-one of the 85 individual indicators made positive contributions to the CFNAI in January, while 44 made negative contributions. Forty-one indicators improved from December to January, while 44 indicators deteriorated. Of the indicators that improved, ten made negative contributions.
Production-related indicators contributed –0.36 to the CFNAI in January, down from +0.06 in December. Manufacturing output decreased 0.8 percent in January after rising 0.3 percent in December, and manufacturing capacity utilization decreased to 76.0 percent in January from 76.7 percent in the previous month.
Employment-related indicators contributed +0.13 to the CFNAI in January, up from +0.06 in December. The unemployment rate decreased to 6.6 percent in January from 6.7 percent in December, while nonfarm payrolls increased by 113,000 in January after rising by 75,000 in the previous month. The contribution from the sales, orders, and inventories category to the CFNAI increased to +0.02 in January from –0.01 in December.
The contribution from the consumption and housing category to the CFNAI moved down to –0.18 in January from –0.14 in December. Housing starts declined to 880,000 annualized units in January from 1,048,000 in December, and housing permits declined to 937,000 annualized units in January from 991,000 in the previous month.
The CFNAI was constructed using data available as of February 20, 2014. At that time, January data for 51 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The December monthly index was revised to –0.03 from an initial estimate of +0.16. 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 December monthly index was due primarily to the latter.
Posted: February 24, 2014 Monday 08:30 AM