The 2020 Mid-Year Economic Update_long

Chicago Fed National Activity Index Moderates in June

Latest Chicago Fed National Activity Index (CFNAI) shows that three of the four broad categories of indicators used to construct the index made positive contributions in June, but two categories declined from May.
Chicago Fed National Activity Index June 2021

The Chicago Fed National Activity Index (CFNAI) decreased to +0.09 in June from +0.26 in May. Three of the four broad categories of indicators used to construct the index made positive contributions in June, but two categories deteriorated from May. The index’s three-month moving average, CFNAI-MA3, declined to +0.06 in June from +0.80 in May.

The CFNAI Diffusion Index, which is also a three-month moving average, decreased to +0.13 in June from +0.40 in May. Forty-five of the 85 individual indicators made positive contributions to the CFNAI in June, while 40 made negative contributions. Forty-five indicators improved from May to June, while 40 indicators deteriorated. Of the indicators that improved, 13 made negative contributions.

Production-related indicators contributed +0.01 to the CFNAI in June, down from +0.26 in May. Industrial production moved up 0.4% in June after increasing 0.7% in May, and manufacturing production decreased 0.1% in June after rising 0.9% in the previous month. The contribution of the sales, orders, and inventories category to the CFNAI increased to +0.06 in June from –0.04 in May.

The contribution of the employment, unemployment, and hours category to the CFNAI moved down to +0.09 in June from +0.15 in May. Nonfarm payrolls rose by 850,000 in June after increasing by 583,000 in May, but the unemployment rate ticked up to 5.9% in June. The personal consumption and housing category contributed –0.08 to the CFNAI in June, up slightly from –0.11 in May. Housing starts increased to 1,643,000 annualized units in June from 1,546,000 in May, but housing permits decreased to 1,598,000 annualized units in June from 1,683,000 in the previous month.

The CFNAI was constructed using data available as of July 20, 2021. At that time, June data for 50 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The May monthly index value was revised to +0.26 from an initial estimate of +0.29, and the April monthly index value was revised to –0.16 from last month’s estimate of –0.09. Revisions to the monthly index can be attributed to two main factors: revisions in previously published data and differences between the estimates of previously unavailable data and subsequently published data. The revisions to both the May and April monthly index values were primarily due to the latter.

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