The 2020 Mid-Year Economic Update_long

Chicago Fed National Activity Index Increases in June

The indexs three-month moving average increased to -0.01.

The Chicago Fed National Activity Index moved up to +0.08 in June from -0.08 in May. Three of the four broad categories of indicators that make up the index increased from May, and two of the four categories made positive contributions to the index in June.

The index’s three-month moving average, CFNAI-MA3, edged up to -0.01 in June from -0.07 in May. June’s CFNAI-MA3 suggests that growth in national economic activity was very close to its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests limited inflationary pressure from economic activity over the coming year. The CFNAI Diffusion Index, which is also a three-month moving average, moved up to +0.07 in June from -0.01 in May. Forty-eight of the 85 individual indicators made positive contributions to the CFNAI in June, while 37 made negative contributions. Forty-four indicators improved from May to June, while 40 indicators deteriorated and one was unchanged. Of the indicators that improved, 13 made negative contributions.

The contribution from production-related indicators to the CFNAI rose to -0.01 in June from -0.08 in May. Industrial production was up 0.3 percent in June after decreasing 0.2 percent in May; however, manufacturing production was unchanged in June.

Employment-related indicators increased to +0.12 in June from +0.06 in May. The unemployment rate decreased to 5.3 percent in June from 5.5 percent in May. The sales, orders, and inventories category also made a positive contribution to the CFNAI in June, edging up to +0.03 from -0.01 in May.

Personal consumption and housing-related indicators contributed -0.07 to the CFNAI in June, down slightly from -0.05 in May. Consumption indicators, on balance, deteriorated, pushing the category’s contribution lower. However, housing starts increased to 1,174,000 annualized units in June from 1,069,000 in May; and housing permits also moved up, to 1,343,000 annualized units in June from 1,250,000 in the previous month.

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