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Chicago Fed National Activity Index points to an uptick in economic growth in January
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The Chicago Fed National Activity Index (CFNAI) increased to –0.25 in January from –0.51 in December. All four broad categories of indicators that make up the index increased from December, but only one of the four categories made a positive contribution to the index in January. The index’s three-month moving average, CFNAI-MA3, moved up to –0.09 in January from –0.23 in December.
The CFNAI Diffusion Index, which is also a three-month moving average, increased to –0.16 in January from –0.25 in December. Thirty-six of the 85 individual indicators made positive contributions to the CFNAI in January, while 49 made negative contributions. Fifty-six indicators improved from December to January, while 27 indicators deteriorated and two were unchanged. Of the indicators that improved, 30 made negative contributions.
Production-related indicators contributed –0.23 to the CFNAI in January, up from –0.34 in December. Industrial production decreased 0.3 percent in January after decreasing 0.4 percent in December. The contribution of the sales, orders, and inventories category to the CFNAI moved up to –0.02 in January from –0.06 in December. The Institute for Supply Management’s Manufacturing New Orders Index increased to 52.0 in January from 47.6 in the previous month.
Employment-related indicators contributed –0.03 to the CFNAI in January, up from –0.12 in December. Nonfarm payrolls rose by 225,000 in January after increasing by 147,000 in December, but the unemployment rate ticked up to 3.6 percent in January from 3.5 percent in the previous month. The contribution of the personal consumption and housing category to the CFNAI edged up to +0.03 in January from a neutral value in December. Housing permits increased to 1,551,000 annualized units in January from 1,420,000 in the previous month.
The CFNAI was constructed using data available as of February 20, 2020. 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 value was revised to –0.51 from an initial estimate of –0.35, and the November monthly index value was revised to +0.49 from last month’s estimate of +0.41. 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 December and November monthly index values were primarily due to the latter.
Posted: February 24, 2020 Monday 08:30 AM