Led by improvements in production-related indicators, the Chicago Fed National Activity Index returned to its historical average of zero in July, up from –0.70 in June. Three of the four broad categories of indicators that make up the index improved from June, but only the production and income category made a positive contribution to the index in July.

The index’s three-month moving average, CFNAI-MA3, edged lower to –0.17 in July from –0.12 in June. July’s CFNAI-MA3 suggests that growth in national economic activity was somewhat below its historical trend. With regard to inflation, the amount of economic slack reflected in the CFNAI-MA3 suggests subdued inflationary pressure from economic activity over the coming year.

Production-related indicators made a contribution of +0.43 to the index in July, up from –0.16 in June. Total industrial production increased 1.0 percent in July after edging lower 0.1 percent in June. In addition, manufacturing production rose 1.1 percent in July after decreasing 0.4 percent in the previous month, and manufacturing capacity utilization increased to 72.2 percent in July from 71.4 percent in June.

Led by deterioration in production- and employment-related indicators, the Chicago Fed National Activity Index declined to –0.63 in June, down from +0.31 in May. Three of the four broad categories of indicators that make up the index made negative contributions in June, while the sales, orders, and inventories category made the lone positive contribution.

The index’s three-month moving average, CFNAI-MA3, decreased to –0.05 in June from +0.31 in May. The CFNAI-MA3 suggests that growth in national economic activity returned very close to its historical trend in June after reaching its highest level since March 2006 in May. With regard to inflation, it indicates subdued inflationary pressure from economic activity over the coming year.

Production-related indicators made a contribution of –0.11 to the index in June, down from +0.61 in May. Industrial production edged up 0.1 percent in June after increasing 1.3 percent in May; manufacturing production declined 0.4 percent in June after increasing 1.0 percent in the previous month.

The Chicago Fed National Activity Index edged lower to +0.21 in May from +0.25 in April. Production indicators continued to make strong contributions to the index in May, while weaker contributions from employment- and housing-related indicators accounted for the slight decrease in the index from April.

The index’s three-month moving average, CFNAI-MA3, rose to its highest level since March 2006, increasing to +0.28 in May from +0.05 in April. May’s CFNAI-MA3 suggests that growth in national economic activity was above its historical trend. Moving above +0.20, the index’s three-month moving average in May also reached a level historically associated with a mature economic recovery following a recession. With regard to inflation, the CFNAI-MA3 in May indicates limited inflationary pressure from economic activity over the coming year.

Production-related indicators made a contribution of +0.51 to the index in May, compared with +0.39 in April. Industrial production rose 1.2 percent in May after increasing 0.7 percent in April, and manufacturing production increased 0.9 percent for the second straight month.

Led by continued improvements in production- and employment-related indicators, the Chicago Fed National Activity Index increased to +0.29 in April, up from +0.13 in March. April marked the highest level of the index since December 2006 and the third time in the past four months that the index indicated above-average economic activity. Three of the four broad categories of indicators that make up the index made positive contributions in April, while the consumption and housing category made the lone negative contribution.

The index’s three-month moving average, CFNAI-MA3, increased to –0.03 in April from –0.09 in March, reaching its highest level since February 2007. April’s CFNAI-MA3 suggests that growth in national economic activity was very near its historical trend. With the index still slightly below trend, there remains some economic slack, suggesting subdued inflationary pressure from economic activity over the coming year.

Production-related indicators made a contribution of +0.41 to the index in April, compared with +0.23 in March. Industrial production increased 0.8 percent in April after increasing 0.2 percent in March. In addition, manufacturing production increased 1.0 percent for the second straight month, and manufacturing capacity utilization rose to 70.8 percent in April from 70.0 percent in the previous month.

Led by improvements in production- and employment-related indicators, the Chicago Fed National Activity Index increased to –0.07 in March, up from –0.44 in February. Three of the four broad categories of indicators that make up the index made positive contributions in March, while the consumption and housing category made the lone negative contribution.

The index’s three-month moving average, CFNAI-MA3, increased to –0.18 in March from –0.31 in February. March’s CFNAI-MA3 suggests that growth in national economic activity, while still below average, continues to improve. With regard to inflation, the amount of economic slack reflected in the CFNAI-MA3 indicates subdued inflationary pressure from economic activity over the coming year.

Production-related indicators made a contribution of +0.18 to the index in March, compared with +0.04 in February. Manufacturing industrial production increased 0.9 percent in March after increasing 0.2 percent in February, and manufacturing capacity utilization rose to 70.0 percent in March from 69.4 percent in the previous month. The manufacturing capacity utilization rate in March reached its highest level since November 2008.

Led by declines in production-related indicators, the Chicago Fed National Activity Index decreased to –0.64 in February, down from –0.04 in January. Three of the four broad categories of indicators that make up the index deteriorated, and only the sales, orders, and inventories category made a positive contribution.

The index’s three-month moving average, CFNAI-MA3, decreased to –0.39 in February from –0.13 in January, but for the second consecutive month, it was higher than at any point since December 2007. February’s CFNAI-MA3 suggests that growth in national economic activity was below its historical trend. With regard to inflation, the amount of economic slack reflected in the CFNAI-MA3 indicates low inflationary pressure from economic activity over the coming year.

Production-related indicators made a negative contribution to the index for the first time in eight months, contributing –0.08 to the index in February compared with +0.41 in January. Adverse weather conditions played a part in both manufacturing industrial production decreasing 0.2 percent in February and manufacturing capacity utilization decreasing for the first time in eight months.

Led by improvements in production- and employment-related indicators, the Chicago Fed National Activity Index in January was slightly positive for the second time in the past three months. From June 2007 through October 2009, the index had been consistently negative. The index increased to +0.02 in January from –0.58 in December, with all four categories of indicators having improved.

The index’s three-month moving average, CFNAI-MA3, increased to –0.16 in January from –0.47 in December, reaching its highest level since July 2007. January’s CFNAI-MA3 suggests that, consistent with the early stages of a recovery following a recession, growth in national economic activity is beginning to near its historical trend. With regard to inflation, the amount of economic slack reflected in the CFNAI-MA3 indicates subdued inflationary pressure from economic activity over the coming year.

Production-related indicators made a positive contribution to the index for the seventh consecutive month. As a group, they contributed +0.45 in January, up from +0.14 in December. Manufacturing industrial production increased 0.9 percent in January after being unchanged in December; and manufacturing capacity utilization increased to 69.2 percent in January, its highest level since November 2008.

Led by declines in employment-related indicators, the Chicago Fed National Activity Index decreased to –0.61 in December, down from –0.39 in November. Three of the four broad categories of indicators that make up the index moved lower, although both the production and income category and the sales, orders, and inventories category made positive contributions.

In contrast to the monthly index, the index’s three-month moving average, CFNAI-MA3, increased slightly to –0.61 in December from –0.68 in November. December’s CFNAI-MA3 suggests that growth in national economic activity was below its historical trend; but the level of activity remained in a range historically consistent with the early stages of a recovery following a recession. With regard to inflation, the amount of economic slack reflected in the CFNAI-MA3 indicates low inflationary pressure from economic activity over the coming year.

The decline in the monthly index was driven mainly by decreases in employment-related indicators. These indicators as a group made a contribution of –0.27 to the index in December, down from –0.11 in November. Payroll employment declined by 85,000 in December after increasing by 4,000 in November; however, the unemployment rate was unchanged at 10.0%.

Most of the weakness in the index continued to stem from the consumption and housing category. This category’s contribution to the index was –0.50 in December, down slightly from –0.46 in November. Housing starts declined to 557,000 annualized units in December from 580,000 in November. Partially offsetting this was an increase in building permits to 653,000 annualized units in December from 589,000 in the previous month.

Production-related indicators made a positive contribution to the index for the sixth consecutive month. As a group, they contributed +0.13 to the index in December, compared with +0.25 in November. Manufacturing industrial production was unchanged in December after increasing 0.9 percent in November; but total industrial production increased 0.6 percent for the second consecutive month.

Led by improvements in production-related and employment-related indicators, the Chicago Fed National Activity Index increased to –0.32 in November, up sharply from –1.02 in October. Two of the four broad categories of indicators that make up the index improved, although only the production and income category made a positive contribution.

The index’s three-month moving average, CFNAI-MA3, increased to –0.77 in November from –0.87 in October. November’s CFNAI-MA3 suggests that growth in national economic activity was below its historical trend. The level of activity, however, remained in a range that has historically been consistent with the early stages of a recovery following a recession. With regard to inflation, the amount of economic slack reflected in the CFNAI-MA3 indicates low inflationary pressure from economic activity over the coming year.

Production-related indicators made a contribution of +0.35 to the index in November, compared with –0.09 in October. This contribution accounted for much of the improvement in the index in November. Industrial production rose 0.8 percent in November after being unchanged in October; and manufacturing production increased 1.1 percent in November after decreasing 0.2 percent in the previous month. Furthermore, manufacturing capacity utilization increased to 68.4 percent in November from 67.6 percent in October.

The Chicago Fed National Activity Index was –1.08 in October, down very slightly from –1.01 in September. A decline in the contribution of production and income indicators offset small improvements in the other three broad categories of indicators that make up the index.

The index’s three-month moving average, CFNAI-MA3, decreased to –0.91 in October from –0.67 in September, declining for the first time in 2009. October’s CFNAI-MA3 suggests that growth in national economic activity remained below its historical trend. With regard to inflation, the amount of economic slack reflected in the CFNAI-MA3 indicates low inflationary pressure from economic activity over the coming year.

Production-related indicators—with a contribution of –0.07 in October compared with +0.23 in September—made a negative contribution to the index for the first time since June 2009. Much of the decline in this category’s contribution can be attributed to lower manufacturing production. In particular, durable goods manufacturing declined 0.4 percent in October after rising 1.1 percent in September. Partially offsetting this was an increase in the Institute for Supply Management’s Manufacturing Purchasing Managers’ Production Index. It increased to 63.3 in October from 55.7 in the previous month.

The Chicago Fed National Activity Index was –0.81 in September, down from –0.65 in August. Three of the four broad categories of indicators made negative contributions to the index in September, but the production and income category made a positive contribution for the third consecutive month.

At –0.63 in September (up from –0.96 in the previous month), the index’s three-month moving average, CFNAI-MA3, suggests that growth in national economic activity was below its historical trend. However, the CFNAI-MA3 in September improved to a level greater than –0.7 for the first time since the early months of this recession. For the four previous recessions, the first month when the CFNAI-MA3 was above –0.7 coincided closely with the end of each recession as eventually determined by the National Bureau of Economic Research. With regard to inflation, the amount of economic slack reflected in the CFNAI-MA3 indicates low inflationary pressure from economic activity over the coming year.

Production-related indicators made a smaller positive contribution of +0.27 to the index in September compared with +0.49 in August. Manufacturing production increased 0.8 percent in September after rising 1.2 percent in August, and manufacturing capacity utilization increased to 67.5 percent in September from 66.8 percent in the previous month.

The Chicago Fed National Activity Index was –0.90 in August, down from –0.56 in July. Three of the four broad categories of indicators made negative contributions to the CFNAI in August; the production and income category made a positive contribution to the index for the second consecutive month.

The three-month moving average, CFNAI-MA3, improved for the seventh consecutive month. At –1.09 in August (up from –1.61 in the previous month), the CFNAI-MA3 suggests that growth in national economic activity was below its historical trend. With regard to inflation, the amount of economic slack reflected in the CFNAI-MA3 indicates low inflationary pressure from economic activity over the coming year.

The production-related indicators made a smaller positive contribution of +0.29 to the index in August compared with +0.45 in July. Industrial production increased 0.8 percent in August, down slightly from 1.0 percent in the previous month; and manufacturing production increased 0.6 percent in August after rising 1.4 percent in July. July and August marked the first consecutive increases in industrial production since November and December 2007.

The Chicago Fed National Activity Index was –0.74 in July, up from –1.82 in June. All four broad categories of indicators improved in July, while three of the four continued to make negative contributions to the index. Production-related indicators made a positive contribution to the index for the first time since October 2008 and for only the second time since December 2007.

The three-month moving average, CFNAI-MA3, was –1.69 in July, up from –2.18 in the previous month. July’s CFNAI-MA3 suggests that growth in national economic activity was below its historical trend. With regard to inflation, the amount of economic slack reflected in the CFNAI-MA3 indicates low inflationary pressure from economic activity over the coming year.

The improvement in the index in July was due in large part to the production and income category of indicators. This category made a contribution of +0.26 to the index in July compared with –0.38 in June. Manufacturing production increased 1.0 percent in July, its biggest increase since December 2006, following a decline of 0.5 percent in the previous month. In addition, manufacturing capacity utilization increased to 65.4 in July from 64.7 in June.

The Chicago Fed National Activity Index was –1.80 in June, up from –2.30 in May. All four broad categories of indicators continued to make negative contributions to the index, with employment and housing-related indicators accounting for much of the weakness in June.

The three-month moving average, CFNAI-MA3, was –2.12 in June, up from –2.65 in the previous month. June’s CFNAI-MA3 suggests that growth in national economic activity was well below its historical trend. With regard to inflation, the amount of economic slack reflected in the CFNAI-MA3 indicates low inflationary pressure from economic activity over the coming year. The increase in the index was primarily due to the production and income category of indicators.

This category made a smaller negative contribution to the index in June, –0.32, compared with its contribution in May, –0.70. The smaller negative contribution was driven by the fact that total industrial production decreased 0.4 percent in June after declining 1.2 percent in May.

The Chicago Fed National Activity Index was –2.30 in May, little changed from –2.27 in April. All four broad categories of indicators made negative contributions to the index in May.

The three-month moving average, CFNAI-MA3, was –2.67 in May, up slightly from –2.73 in the previous month. May’s CFNAI-MA3 suggests that growth in national economic activity was well below its historical trend. With regard to inflation, the amount of economic slack reflected in the CFNAI-MA3 indicates low inflationary pressure from economic activity over the coming year.

The small decrease in the index in May was primarily due to the production and income category of indicators. This category made a larger negative contribution to the index in May, –0.65, compared with its contribution in April, –0.47. Total industrial production declined 1.1 percent in May after decreasing 0.7 percent in April. In addition, manufacturing capacity utilization moved down to 65.0 percent in May from 65.6 percent in the previous month.

The Chicago Fed National Activity Index was –2.06 in April, up from –3.36 in March. All four broad categories of indicators improved in April, but each continued to make a negative contribution to the index. The index’s three-month moving average in April reached its highest level since October 2008.

The three-month moving average, CFNAI-MA3, increased to –2.65 in April from –3.29 in the previous month, improving for the third consecutive month. April’s CFNAI-MA3 suggests that growth in national economic activity was below its historical trend. With regard to inflation, it indicates low inflationary pressure from economic activity over the coming year.

The increase in the index was primarily due to the production and income category. This category of indicators made a much smaller negative contribution of –0.35 to the index in April compared with –1.09 in March. Total industrial production decreased 0.5 percent in April after declining 1.7 percent in the previous month.

The Chicago Fed National Activity Index was –2.96 in March, down slightly from –2.82 in February. All four broad categories of indicators continued to make negative contributions to the index in March.

The three-month moving average, CFNAI-MA3, increased to –3.27 in March from –3.57 in the previous month. March’s CFNAI-MA3 suggests that growth in national economic activity was well below its historical trend. With regard to inflation, it indicates little inflationary pressure from economic activity over the coming year.

Employment-related indicators made a large negative contribution of –1.27 to the index in March after contributing –1.29 in the previous month. Total nonfarm payroll employment declined 663,000 in March, after decreasing 651,000 in February; and manufacturing employment decreased 161,000 in March, after declining 169,000 in the previous month.

The Chicago Fed National Activity Index was –2.83 in February, up from –3.74 in January. Three of the four broad categories of indicators—employment, production, and consumption and housing—improved from January. However, all four categories continued to make negative contributions to the index in February.

The three-month moving average, CFNAI-MA3, increased to –3.48 in February from –3.61 in the previous month. February’s CFNAI-MA3 suggests that growth in national economic activity was well below its historical trend. With regard to inflation, it indicates little inflationary pressure from economic activity over the coming year.

Employment-related indicators made a large negative contribution of –1.29 to the index in February after contributing –1.51 in the previous month. Total nonfarm payroll employment decreased by 651,000 in February after declining 655,000 in January; and the unemployment rate rose to 8.1 percent in February from 7.6 percent in the previous month.

The Chicago Fed National Activity Index was –3.45 in January, up slightly from –3.65 in December. All four broad categories of indicators made negative contributions to the index in January.

The three-month moving average, CFNAI-MA3, decreased to –3.41 in January from –2.70 in the previous month, reaching its lowest level since 1975. January’s CFNAI-MA3 suggests that growth in national economic activity was well below its historical trend. With regard to
inflation, it indicates little inflationary pressure from economic activity over the coming year.

The production and income category of indicators made a large negative contribution of –1.35 to the index in January after contributing –1.53 in December. Total industrial production decreased 1.8 percent in January after declining 2.4 percent in the previous month. In particular, manufacturing production of durable goods declined 4.8 percent in January, marking its largest one-month decline since December 1974.

The Chicago Fed National Activity Index was –3.26 in December, down from –2.78 in November. All four broad categories of indicators made negative contributions to the index in December.

The three-month moving average, CFNAI-MA3, increased slightly to –2.40 in December from –2.56 in the previous month. With recent revisions, the three-month moving average reached its lowest value since 1980 in November. December’s CFNAI-MA3 suggests that growth in national economic activity was well below its historical trend. It also indicates little inflationary pressure from economic activity over the coming year.

The production and income category of indicators made a large negative contribution of –1.32 to the index in December, following a contribution of –1.06 in November. Total industrial production declined 2.0 percent in December after decreasing 1.3 percent in the previous month. In addition, manufacturing capacity utilization declined to its lowest level since 1983—at 70.2 percent in December from 71.9 percent in November.

The Chicago Fed National Activity Index was −2.47 in November, down from −1.27 in October. All four broad categories of indicators made negative ontributions to the index in November.

On December 1, 2008, the National Bureau of Economic Research determined that the U.S. economy had reached a business cycle peak in December 2007. The three-month moving average, CFNAI-MA3, first indicated an increasing likelihood that a recession had begun in December 2007, as initially reported in the March 24, 2008, CFNAI release.

The CFNAI-MA3 decreased slightly to –2.49 in November from –2.40 in the previous month. This negative value suggests that growth in national economic activity was well below its historical trend. With regard to inflation, November’s three-month moving average indicates little inflationary pressure from economic activity over the coming year.

The decrease in the monthly index was driven primarily by employment-related indicators, which contributed –1.03 to the index in November after contributing –0.82 in October. Total nonfarm payroll employment declined by 533,000 in November after decreasing 320,000 in October; and private payrolls declined by 540,000 in November after decreasing 362,000 in October.

The Chicago Fed National Activity Index was –1.06 in October, up from –3.11 in September. The improvement in the index in October was primarily driven by the rise in industrial production from September. Production-related indicators made a positive contribution to the index in October, while the other three broad categories made negative contributions.

The Chicago Fed National Activity Index was −2.57 in September, down from −1.61 in August. Most of the index's decline in September was driven by the steep drop in industrial production, as reflected in the contribution of the production and income category of indicators. However, all four broad categories of indicators made negative contributions to the index in September.