Research >> Economics
Chicago Fed National Activity improved in October
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The index’s three-month moving average, CFNAI-MA3, decreased to –0.20 in October from –0.03 in September. October’s CFNAI-MA3 suggests that growth in national economic activity was somewhat below its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests subdued inflationary pressure from economic activity over the coming year.
The CFNAI Diffusion Index, which is also a three-month moving average, decreased to –0.18 in October from –0.07 in September. Forty-one of the 85 individual indicators made positive contributions to the CFNAI in October, while 44 made negative contributions. Forty-six indicators improved from September to October, while 39 indicators deteriorated. Of the indicators that improved, 16 made negative contributions.
The contribution from production-related indicators to the CFNAI increased to –0.05 in October from –0.17 in September. Manufacturing production moved up 0.4 percent in October, following a decline of 0.1 percent in September. However, industrial production declined by 0.2 percent in October for the second straight month. The sales, orders, and inventories category made a contribution of –0.01 to the CFNAI in October, down slightly from +0.01 in September.
Employment-related indicators contributed +0.11 to the CFNAI in October, up from –0.06 in September. Nonfarm payrolls increased 271,000 in October after rising 137,000 in September, and the unemployment rate ticked down to 5.0 percent in October from 5.1 percent in the previous month.
The contribution of the personal consumption and housing category to the CFNAI ticked down to –0.09 in October from –0.07 in September. Housing starts declined to 1,060,000 annualized units in October from 1,191,000 in September. However, housing permits moved up to 1,150,000 annualized units in October from 1,105,000 in the previous month.
The CFNAI was constructed using data available as of November 19, 2015. At that time, October data for 51 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 –0.29 from an initial estimate of –0.37, and the August monthly index value was revised to –0.29 from last month’s estimate of –0.39. Revisions to the monthly index value 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 September and August monthly index values were due primarily to the former.
Posted: November 23, 2015 Monday 08:30 AM