Led by improvements in production-related indicators, the Chicago Fed National Activity Index increased to -0.14 in September from -0.72 in August. All four broad categories of indicators that make up the index increased from August, but in September, all four categories made negative contributions to the index for the second straight month.
The index’s three-month moving average, CFNAI-MA3, edged down to -0.21 in September from -0.14 in August. September’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, moved down to -0.12 in September from -0.03 in August. Forty-one of the 85 individual indicators made positive contributions to the CFNAI in September, while 44 made negative contributions. Sixty-seven indicators improved from August to September, while 17 indicators deteriorated and one was unchanged. Of the indicators that improved, 29 made negative contributions.
The contribution from production-related indicators to the CFNAI rose to -0.01 in September from -0.39 in August. Manufacturing industrial production increased 0.2 percent in September after decreasing 0.5 percent in August; and manufacturing capacity utilization ticked up to 74.9 percent in September from 74.8 percent in the previous month. The sales, orders, and inventories category also made a contribution of -0.01 to the CFNAI in September, up from -0.06 in August.
Employment-related indicators contributed –0.03 to the CFNAI in September, up from -0.15 in August. Civilian nonagricultural employment increased by 442,000 in September after decreasing by 37,000 in August; but the civilian unemployment rate ticked up to 5 percent in September from 4.9 percent in the previous month.
The contribution of the personal consumption and housing category to the CFNAI edged up to -0.09 in September from -0.12 in August. Housing permits increased to 1,225,000 annualized units in September from 1,152,000 in August. However, housing starts decreased to 1,047,000 annualized units in September from 1,150,000 in the previous month.
