The 2020 Mid-Year Economic Update_long

Chicago Fed National Index Down in May

Index points to slower economic growth compared with April.

Led by declines in production-related indicators, the Chicago Fed National Activity Index (CFNAI) fell to –0.15 in May from +0.42 in April. Two of the four broad categories of indicators that make up the index decreased from April, and two of the four categories made negative contributions to the index in May, the researcher said. The index’s three-month moving average decreased to +0.18 in May from +0.48 in April.

The CFNAI Diffusion Index, which is also a three-month moving average, moved down to +0.10 in May from +0.23 in April. Thirty-nine of the 85 individual indicators made positive contributions to the CFNAI in May, while 46 made negative contributions. Forty-three indicators improved from April to May, while 42 indicators deteriorated. Of the indicators that improved, 17 made negative contributions.

Production-related indicators contributed –0.29 to the CFNAI in May, down from +0.33 in April. Manufacturing industrial production decreased 0.7 percent in May after increasing 0.6 percent in April. In contrast, the sales, orders, and inventories category made a contribution of +0.05 to the CFNAI in May, up from a neutral contribution in April.

Employment-related indicators contributed +0.13 to the CFNAI in May, up slightly from +0.12 in April. Nonfarm payrolls rose by 223,000 in May after increasing by 159,000 in April. The contribution of the personal consumption and housing category to the CFNAI edged down to –0.04 in May from –0.03 in April. Housing permits decreased to 1,301,000 annualized units in May from 1,364,000 in April, but housing starts increased to 1,350,000 annualized units in May from 1,286,000 in the previous month.


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