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Led by gains in production-related indicators, the Chicago Fed National Activity Index increased to 0.44 in February from -0.49 in January. All four broad categories of indicators that make up the index increased from January, and three of the four categories made positive contributions to the index in February.
The index’s three-month moving average, CFNAI-MA3, decreased to 0.09 in February from 0.28 in January, marking its fourth consecutive reading above zero. February’s CFNAI-MA3 suggests that growth in national economic activity was somewhat above 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 ticked up to 0.14 in February from 0.13 in January. Fifty-eight of the 85 individual indicators made positive contributions to the CFNAI in February, while 27 made negative contributions. Sixty-four indicators improved from January to February, while 21 indicators deteriorated. Of the indicators that improved, 16 made negative contributions.
Production-related indicators contributed 0.34 to the CFNAI in February, up from -0.30 in January. Manufacturing production increased 0.8 percent in February after decreasing 0.3 percent in January, and manufacturing capacity utilization rose to 78.3 percent in February from 77.8 percent in the previous month.
Employment-related indicators contributed 0.20 to the CFNAI in February, up from 0.01 in January. The unemployment rate moved down to 7.7 percent in February from 7.9 percent in January, and nonfarm payrolls rose by 236,000 in February after increasing by 119,000 in January. The contribution from the sales, orders, and inventories category to the CFNAI in February was also positive, moving up to 0.05 from -0.01 in January.
The contribution from the consumption and housing category to the CFNAI increased to -0.16 in February from -0.19 in January. Housing permits increased to 946,000 annualized units in February from 904,000 in January, and housing starts edged up to 917,000 annualized units in February from 910,000 in the previous month.