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Chicago Fed National Activity points to a pickup in economic growth in August
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Led by improvements in production-related indicators, the Chicago Fed National Activity Index (CFNAI) rose to +0.10 in August from –0.41 in July. All four broad categories of indicators that make up the index increased from July, but three of the four categories made negative contributions to the index in August. The index’s three-month moving average, CFNAI-MA3, edged up to –0.06 in August from –0.14 in July.
The CFNAI Diffusion Index, which is also a three-month moving average, increased to –0.12 in August from –0.20 in July. Forty-four of the 85 individual indicators made positive contributions to the CFNAI in August, while 41 made negative contributions. Fifty-two indicators improved from July to August, while 30 indicators deteriorated and three were unchanged. Of the indicators that improved, 14 made negative contributions.
Production-related indicators contributed +0.16 to the CFNAI in August, up from –0.26 in July. Total industrial production rose 0.6 percent in August after decreasing 0.2 percent in July; however, the Institute for Supply Management’s Manufacturing Composite Index decreased to 49.1 in August from 51.2 in July. The contribution of the sales, orders, and inventories category to the CFNAI moved up to –0.02 in August from –0.07 in July.
Employment-related indicators contributed –0.02 to the CFNAI in August, up slightly from –0.05 in July. The unemployment rate held steady at 3.7 percent in August, and total nonfarm payrolls increased by 130,000 in August after rising by 159,000 in the previous month. The contribution of the personal consumption and housing category to the CFNAI ticked up to –0.02 in August from –0.03 in July. Housing starts increased to 1,364,000 annualized units in August from 1,215,000 in July.
The CFNAI was constructed using data available as of September 19, 2019. At that time, August data for 51 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The July monthly index value was revised to –0.41 from an initial estimate of –0.36, and the June monthly index value was revised to +0.13 from last month’s estimate of +0.03. 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 July and June monthly index values were primarily due to the latter.
Posted: September 23, 2019 Monday 08:30 AM