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Chicago Fed National Activity Points to a Moderation in Economic Growth in March
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The CFNAI Diffusion Index, which is also a three-month moving average, edged down to +0.18 in March from +0.20 in February. Forty-four of the 85 individual indicators made positive contributions to the CFNAI in March, while 41 made negative contributions. Twenty-five indicators improved from February to March, while 59 indicators deteriorated and one was unchanged. Of the indicators that improved, nine made negative contributions.
Production-related indicators contributed +0.14 to the CFNAI in March, down from +0.54 in February. Total industrial production increased 0.5 percent in March after increasing 1.1 percent in February. The sales, orders, and inventories category made a contribution of +0.04 to the CFNAI in March, down from +0.14 in February. The Institute for Supply Management’s Manufacturing New Orders Index decreased to 61.9 in March from 64.2 in the previous month.
Employment-related indicators contributed –0.07 to the CFNAI in March, down from +0.35 in February. Nonfarm payrolls increased by 103,000 in March after increasing by 326,000 in February. The contribution of the personal consumption and housing category to the CFNAI moved up to –0.01 in March from –0.06 in February. Housing starts increased to 1,319,000 annualized units in March from 1,295,000 in February, and housing permits increased to 1,354,000 annualized units in March from 1,321,000 in the previous month.
The CFNAI was constructed using data available as of April 19, 2018. At that time, March data for 51 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The February monthly index value was revised to +0.98 from an initial estimate of +0.88, and the January monthly index value was revised to –0.26 from last month’s estimate of +0.02. 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 February monthly index value was primarily due to the former, while the revision to the January monthly index value was primarily due to the latter.
Led by slower growth in production- and employment-related indicators, the Chicago Fed National Activity Index (CFNAI) declined to +0.10 in March from +0.98 in February. Three of the four broad categories of indicators that make up the index decreased from February, but two of the four categories made positive contributions to the index in March. The index’s three-month moving average, CFNAI-MA3, decreased to +0.27 in March from +0.31 in February.
Posted: April 23, 2018 Monday 08:30 AM