The 2020 Mid-Year Economic Update_long

Chicago Fed National Activity Index Increases in April

The indexs three-month moving average increased to -0.23.

The Chicago Fed National Activity Index moved up to -0.15 in April from -0.36 in March. Two of the four broad categories of indicators that make up the index increased from March, but only one of the four categories made a positive contribution to the index in April.

The index’s three-month moving average, CFNAI-MA3, increased slightly to -0.23 in April from -0.27 in March. April’s CFNAI-MA3 suggests that growth in national economic activity was some­what below its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests subdued inflationary pressure from economic activity over the coming year.

The CFNAI Diffusion Index, which is also a three-month moving average, was unchanged at -0.12 in April. Thirty-eight of the 85 individual indicators made positive contributions to the CFNAI in April, while 47 made negative contributions. Forty-six indicators improved from March to April, while 37 indicators deteriorated and two were unchanged. Of the indicators that improved, 19 made negative contributions.

The contribution from production-related indicators to the CFNAI was unchanged at -0.16 in April. Industrial production decreased 0.3 percent in April for the second straight month. The sales, orders, and inventories category made a neutral contribution to the CFNAI in April, down slightly from +0.01 in March.

Employment-related indicators contributed +0.08 to the CFNAI in April, up from -0.08 in March. Nonfarm payrolls increased by 223,000 in April, following a gain of 85,000 in the previous month; and the unemployment rate edged down to 5.4 percent in April from 5.5 percent in March.

The contribution of the personal consumption and housing category to the CFNAI increased to -0.06 in April from -0.12 in March. Housing starts moved up to 1,135,000 annualized units in April from 944,000 in March. In addition, housing permits increased to 1,143,000 annualized units in April from 1,038,000 in the previous month.

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