The 2020 Mid-Year Economic Update_long

Chicago Fed National Activity Index Ticks Down in September

The index's three-month moving average, CFNAI-MA3, decreased to -0.09 in September.

The Chicago Fed National Activity Index (CFNAI) ticked down to -0.37 in September from -0.39 in August. Two of the four broad categories of indicators that make up the index decreased from August, and all four categories made nonpositive contributions to the index in September.

The index’s three-month moving average, CFNAI-MA3, decreased to -0.09 in September from +0.01 in August. September’s CFNAI-MA3 suggests that growth in national economic activity was slightly 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, decreased to -0.17 in September from -0.04 in August. Twenty-six of the 85 individual indicators made positive contributions to the CFNAI in September, while 59 made negative contributions. Forty-two indicators improved from August to September, while 42 indicators deteriorated and one was unchanged. Of the indicators that improved, 25 made negative contributions.

The contribution from production-related indicators to the CFNAI ticked up to -0.18 in September from -0.21 in August. Manufacturing production moved down 0.1 percent in September, following a decline of 0.4 percent in August. Similarly, the sales, orders, and inventories category made a neutral contribution to the CFNAI in September, up slightly from -0.03 in August.

Employment-related indicators contributed -0.11 to the CFNAI in September, down slightly from -0.08 in August. Civilian employ­ment declined by 0.2 percent in September, following an increase of 0.1 percent in August; however, the unemployment rate was unchanged at 5.1 percent in September.

The contribution of the personal consumption and housing cate­gory to the CFNAI ticked down to -0.08 in September from -0.06 in August. Housing permits declined to 1,103,000 annualized units in September from 1,161,000 in the previous month. However, housing starts moved up to 1,206,000 annualized units in September from 1,132,000 in August.

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