Chicago Fed National Activity Index Decreases in July

The indexs three-month moving average ticked down to +0.01.

The Chicago Fed National Activity Index fell to -0.41 in August from +0.51 in July. All four broad categories of indicators that make up the index decreased from July, and all four categories made negative contributions to the index in August.

The index’s three-month moving average, CFNAI-MA3, ticked down to +0.01 in August from +0.02 in July. August’s CFNAI-MA3 suggests that growth in national economic activity was very close to 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, decreased to -0.09 in August from +0.05 in July. Twenty-five of the 85 individual indicators made positive contributions to the CFNAI in August, while 60 made negative contributions. Twenty-two indicators improved from July to August, while 62 indicators deteriorated and one was unchanged. Of the indicators that improved, 12 made negative contributions.

The contribution from production-related indicators to the CFNAI fell to -0.30 in August from +0.36 in July. Manufacturing production moved down 0.5 percent in August, following a gain of 0.9 percent in July. Manufacturing capacity utilization declined to 75.8 percent in August from 76.2 percent in July.

Employment-related indicators contributed -0.01 in August to the CFNAI, down from +0.18 in July. Nonfarm payrolls increased by 173,000 in August, following a gain of 245,000 in July; however, the unemployment rate declined to 5.1 percent in August from 5.3 percent in July.

The contribution of the personal consumption and housing category to the CFNAI edged down to -0.08 in August from -0.06 in July. Housing starts moved down to 1,126,000 annualized units in August from 1,161,000 in July. However, housing permits increased to 1,170,000 annualized units in August from 1,130,000 in the previous month. The sales, orders, and inventories category also made a negative contribution to the CFNAI in August, decreasing to -0.03 from +0.03 in July.

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