The Chicago Fed National Activity Index moved up to +0.34 in July from -0.07 in June. Two of the four broad categories of indicators that make up the index increased from June, and three of the four categories made positive contributions to the index in July.
The index’s three-month moving average, CFNAI-MA3, edged up to a neutral reading in July from -0.08 in June. July’s CFNAI-MA3 suggests that growth in national economic activity was at 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 +0.06 in July from a neutral reading in June. Fifty of the 85 individual indicators made positive contributions to the CFNAI in July, while 35 made negative contributions. Forty-four indicators improved from June to July, while 40 indicators deteriorated and one was unchanged. Of the indicators that improved, 12 made negative contributions.
The contribution from production-related indicators to the CFNAI rose to +0.28 in July from -0.14 in June. Industrial production was up 0.6 percent in July, following a gain of 0.1 percent in June. Manufacturing production increased 0.8 percent in July, after declining 0.3 percent in the previous month; and manufacturing capacity utilization rose to 76.2 percent in July, up from 75.7 percent in June.
Employment-related indicators to the CFNAI was unchanged at +0.11 in July. The unemployment rate was steady at 5.3 percent in July. The sales, orders and inventories category also made a positive contribution to the CFNAI in July, though this contribution edged down to +0.01 from +0.06 in June.
The contribution of the personal consumption and housing category to the CFNAI moved up to -0.06 in July from -0.10 in June. Consumption indicators, on balance, improved in July, pushing the category’s contribution higher. Additionally, housing starts ticked up to 1,206,000 annualized units in July from 1,204,000 in June. However, housing permits declined to 1,119,000 annualized units in July from 1,337,000 in the previous month.
