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.