The 2020 Mid-Year Economic Update_long

Chicago Fed National Activity Index Improves to +0.83 in October

Latest Chicago Fed National Activity Index (CFNAI) shows that three of four broad categories of indicators used to construct the index made positive contributions in October, and three of the four categories increased from September.
CFNAI October 2020

Led by improvements in production-related indicators, the Chicago Fed National Activity Index (CFNAI) increased to +0.83 in October from +0.32 in September. Three of the four broad categories of indicators used to construct the index made positive contributions in October, and three of the four categories increased from September. The index’s three-month moving average, CFNAI-MA3, fell to +0.75 in October from +1.37 in September.

The CFNAI Diffusion Index, which is also a three-month moving average, edged down to +0.51 in October from +0.55 in September. Sixty-one of the 85 individual indicators made positive contributions to the CFNAI in October, while 24 made negative contributions. Fifty-four indicators improved from September to October, 30 indicators deteriorated, and one was unchanged. Of the indicators that improved, eight made negative contributions.

Production-related indicators contributed +0.36 to the CFNAI in October, up from –0.10 in September. Manufacturing production increased 1% in October after edging up 0.1% in September, and manufacturing capacity utilization increased by 0.7 percentage points in October after edging up by 0.1 percentage points in the previous month. The contribution of the sales, orders, and inventories category to the CFNAI increased to +0.08 in October from a neutral value in September.

Employment-related indicators contributed +0.39 to the CFNAI in October, up slightly from +0.30 in September. Nonfarm payrolls increased by 638,000 in October after rising by 672,000 in September, but the unemployment rate fell by 1 percentage point in October after decreasing by 0.5 percentage points in the previous month. The contribution of the personal consumption and housing category to the CFNAI moved down to –0.01 in October from +0.12 in September.

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