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Led by gains in employment- and production-related indicators, the Chicago Fed National Activity Index (CFNAI) increased to 0.60 in November from -0.07 in October. All four broad categories of indicators that make up the index increased from October, and three of the four categories made positive contributions to the index in November.
The index’s three-month moving average, CFNAI-MA3, increased to 0.25 in November from 0.12 in October, marking its second consecutive reading above zero and highest reading since February 2012. November’s CFNAI-MA3 suggests that growth in national economic activity was 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 increased to 0.27 in November from 0.24 in October. Fifty-six of the 85 individual indicators made positive contributions to the CFNAI in November, while 29 made negative contributions. Fifty-four indicators improved from October to November, while 30 indicators deteriorated and one was unchanged. Of the indicators that improved, 11 made negative contributions.
Employment-related indicators contributed 0.28 to the CFNAI in November, up from -0.05 in October. The unemployment rate decreased to 7 percent in November from 7.3 percent in October, and total payroll employment increased by 203,000 in November after rising by 200,000 in the previous month.
Production-related indicators contributed 0.39 to the CFNAI in November, up from 0.07 in October. Industrial production rose 1.1 percent in November after increasing 0.1 percent in October, and manufacturing capacity utilization increased to 76.8 percent in November from 76.4 percent in the previous month. The contribution from the sales, orders, and inventories category to the CFNAI increased to 0.06 in November from +0.04 in October.
The contribution from the consumption and housing category to the CFNAI ticked up to -0.12 in November from -0.13 in October. Housing starts increased to 1,091,000 annualized units in November from 889,000 in October. However, housing permits edged down to 1,007,000 annualized units in November from 1,039,000 in the previous month.