The 2020 Mid-Year Economic Update_long

Chicago Fed National Activity Index Falls to -0.45 in September

Three of the four board categories of indicators that make up the index decreased from August, and all four made negative contributions to the index in September.

The Chicago Fed National Activity Index fell to -0.45 in September, down from +0.15 in August. Three of the four board categories of indicators that make up the index decreased from August, and all four made negative contributions to the index in September. The index’s three-month moving average, CFNAI-MA3, was down to -0.24 in September from -0.06 in August.

The CFNAI Diffusion Index, which is also a three-month moving average, decreased to –0.25 in September from –0.10 in August. Thirty-one of the 85 individual indicators made positive contributions to the CFNAI in September, while 54 made negative contributions. Twenty-nine indicators improved from August to September, while 54 indicators deteriorated and two were unchanged. Of the indicators that improved, 12 made negative contributions.

Production-related indicators contributed -0.37 to the CFNAI in September, down from +0.19 in August. Total industrial produc­tion decreased 0.4 percent in September after rising 0.8 percent in August. The contribution of the sales, orders, and inventories category to the CFNAI ticked down to -0.02 in September from -0.01 in August.

Employment-related indicators contributed -0.02 to the CFNAI in September, up slightly from -0.03 in August. The unemployment rate moved down to 3.5 percent in September from 3.7 percent in August, but total nonfarm payrolls increased by 136,000 in September after rising by 168,000 in the previous month. The contribution of the personal consumption and housing category to the CFNAI edged down to -0.04 in September from a neutral value in August. Housing starts decreased to 1,256,000 annualized units in September from 1,386,000 in August.

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