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Chicago Fed National Activity Points to a slight increase in economic growth in October
Led by improvements in employment-related indicators, the Chicago Fed National Activity Index (CFNAI) increased to +0.24 in October from +0.14 in September. Only one of the four broad categories of indicators that make up the index increased from September, but three of the four categories made positive contributions to the index in October. The index’s three-month moving average, CFNAI-MA3, ticked up to +0.31 in October from +0.30 in September.
The CFNAI Diffusion Index, which is also a three-month moving average, increased to +0.32 in October from +0.24 in September. Fifty of the 85 individual indicators made positive contributions to the CFNAI in October, while 35 made negative contributions. Fifty-one indicators improved from September to October, while 33 indicators deteriorated and one was unchanged. Of the indicators that improved, 17 made negative contributions.
The contribution from production-related indicators to the CFNAI moved down to +0.06 in October from +0.09 in September. Industrial production edged up 0.1 percent in October after increasing 0.2 percent in September. The contribution from the sales, orders, and inventories category to the CFNAI was unchanged at +0.04 in October.
Employment-related indicators contributed +0.19 to the CFNAI in October, up from +0.05 in September. Total nonfarm payrolls rose by 250,000 in October after increasing by 118,000 in the previous month. The contribution of the personal consumption and housing category to the CFNAI ticked down to –0.05 in October from –0.04 in September. On balance, housing indicators weakened slightly from September, pushing down the category’s overall contribution in October.
The CFNAI was constructed using data available as of November 20, 2018. At that time, October data for 50 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The September monthly index value was revised to +0.14 from an initial estimate of +0.17, and the August monthly index value was revised to +0.53 from last month’s estimate of +0.27. 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 September monthly index value was primarily due to the former, while the revision to the August monthly index value was primarily due to the latter.
Posted: November 26, 2018 Monday 10:00 AM