Led by some moderation in the growth of production- and employment-related indicators, the Chicago Fed National Activity Index (CFNAI) declined to +1.18 in July from +5.33 in June. Three of the four broad categories of indicators used to construct the index made positive contributions in July, but all four categories decreased from June. The index’s three-month moving average, CFNAI-MA3, rose to +3.59 in July from –2.78 in June.
The CFNAI Diffusion Index, which is also a three-month moving average, moved up to +0.62 in July from +0.14 in June. Fifty-six of the 85 individual indicators made positive contributions to the CFNAI in July, while 29 made negative contributions. Twenty-five indicators improved from June to July, while 60 indicators deteriorated. Of the indicators that improved, nine made negative contributions.
Production-related indicators contributed +1.09 to the CFNAI in July, down from +2.21 in June. Manufacturing industrial production increased 3.4 percent in July after rising 7.4 percent in June, and manufacturing capacity utilization moved up by 2.3 percentage points in July after increasing by 4.6 percentage points in the previous month. The contribution of the sales, orders, and inventories category to the CFNAI moved down to –0.31 in July from +0.77 in June.
Employment-related indicators contributed +0.38 to the CFNAI in July, down from +1.94 in June. Nonfarm payrolls increased by 1.8 million in July after rising by 4.8 million in June, and the unemployment rate decreased by 0.9 percentage points in July after falling by 2.2 percentage points in the previous month. The contribution of the personal consumption and housing category to the CFNAI decreased to +0.02 in July from +0.42 in June.