Research >> Economics
Chicago Fed National Activity picked up in July
|
The index’s three-month moving average, CFNAI-MA3, edged up to a neutral reading in July from –0.08 in June. July’s CFNAI-MA3 suggests that growth in national economic activity was at its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests limited inflationary pressure from economic activity over the coming year.
The CFNAI Diffusion Index, which is also a three-month moving average, moved up to +0.06 in July from a neutral reading in June. Fifty of the 85 individual indicators made positive contributions to the CFNAI in July, while 35 made negative contributions. Forty-four indicators improved from June to July, while 40 indicators deteriorated and one was unchanged. Of the indicators that improved, 12 made negative contributions.
The contribution from production-related indicators to the CFNAI rose to +0.28 in July from –0.14 in June. Industrial production was up 0.6 percent in July, following a gain of 0.1 percent in June. Manufacturing production increased 0.8 percent in July, after declining 0.3 percent in the previous month; and manufacturing capacity utilization rose to 76.2 percent in July, up from 75.7 percent in June.
The contribution from employment-related indicators to the CFNAI was unchanged at +0.11 in July. The unemployment rate was steady at 5.3 percent in July, and nonfarm payrolls increased by 215,000 in July after rising by 231,000 in June. The sales, orders, and inventories category also made a positive contribution to the CFNAI in July, though this contribution edged down to +0.01 from +0.06 in June.
The contribution of the personal consumption and housing category to the CFNAI moved up to –0.06 in July from –0.10 in June. Consumption indicators, on balance, improved in July, pushing the category’s contribution higher. Additionally, housing starts ticked up to 1,206,000 annualized units in July from 1,204,000 in June. However, housing permits declined to 1,119,000 annualized units in July from 1,337,000 in the previous month.
The CFNAI was constructed using data available as of August 20, 2015. At that time, July data for 51 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The June monthly index was revised to –0.07 from an initial estimate of +0.08, and the May monthly index was revised to –0.29 from last month’s estimate of –0.08. 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 June monthly index was due primarily to the former, while the revision to the May monthly index was due primarily to the latter.
Posted: August 24, 2015 Monday 08:30 AM