The 2020 Mid-Year Economic Update_long

Chicago Fed National Activity Index Decreased in August

The index's three-month moving average, CFNAI-MA3, was unchanged during the month.

Led by declines in production-related indicators, the Chicago Fed National Activity Index moved down to –0.31 in August from +0.03 in July. Two of the four broad categories of indicators that make up the index decreased from July, and two of the four categories made negative contributions to the index in August. The index’s three-month moving average, CFNAI-MA3, decreased to –0.04 in August from a neutral reading in July.

The CFNAI Diffusion Index, which is also a three-month moving average, was unchanged at –0.01 in August. Thirty-five of the 85 individual indicators made positive contributions to the CFNAI in August, while 50 made negative contributions. Forty-five indicators improved from July to August, while 40 indicators deteriorated. Of the indicators that improved, 14 made negative contributions.

The contribution from production-related indicators to the CFNAI decreased to –0.36 in August from +0.03 in July. Total industrial production declined 0.9 percent in August after moving up 

0.4 percent in July.

Personal consumption and housing-related indicators also made a negative contribution to the CFNAI in August—unchanged from July at –0.06. Housing starts decreased slightly to 1,180,000 annualized units in August from 1,190,000 in July.

Employment-related indicators contributed +0.05 to the CFNAI in August, down from +0.09 in July. Nonfarm payrolls increased by 156,000 in August after increasing by 189,000 in the previous month.

The sales, orders, and inventories category also made a positive contribution to the CFNAI in August, increasing to +0.06 from –0.04 in July. The Institute for Supply Management’s Manufacturing Purchasing Managers’ Inventories Index rose to 55.5 in August from 50 in July.

The CFNAI was constructed using data available as of September 21, 2017. At that time, August data for 51 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The July monthly index value was revised to +0.03 from an initial estimate of –0.01, and the June monthly index value was unchanged from last month’s estimate of +0.16. 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 revision to the July monthly index value was primarily due to the former.

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