The 2020 Mid-Year Economic Update_long

Chicago Fed National Activity Index Declines to +0.79 in August

Latest Chicago Fed National Activity Index (CFNAI) shows that two of four broad categories of indicators used to construct the index made positive contributions in July, but all four categories decreased from July.
CFNAI August

Led by some further moderation in the growth of production-related indicators, the Chicago Fed National Activity Index (CFNAI) declined to +0.79 in August from +2.54 in July. Two of the four broad categories of indicators used to construct the index made positive contributions in August, but all four categories decreased from July. The index’s three-month moving average, CFNAI-MA3, moved down to +3.05 in August from +4.23 in July.

The CFNAI Diffusion Index, which is also a three-month moving average, decreased to +0.62 in August from +0.73 in July. Forty-five of the 85 individual indicators made positive contributions to the CFNAI in August, while 40 made negative contributions. Twenty-nine indicators improved from July to August, while 56 indicators deteriorated. Of the indicators that improved, 11 made negative contributions.

Production-related indicators contributed +0.23 to the CFNAI in August, down from +1.26 in July. Industrial production increased 0.4% in August after rising 3.5% in July. The contribution of the sales, orders, and inventories category to the CFNAI moved down to –0.04 in August from +0.53 in July.

Employment-related indicators contributed +0.63 to the CFNAI in August, down slightly from +0.65 in July. Nonfarm payrolls moved up by 1.4 million in August after increasing by 1.7 million in July, but the unemployment rate fell by 1.8% in August after decreasing by 0.9% in the previous month. The contribution of the personal consumption and housing category to the CFNAI moved down to –0.04 in August from +0.09 in July. Housing starts decreased to 1,416,000 annualized units in August from 1,492,000 in the previous month.

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