The Chicago Fed National Activity Index’s three-month moving average, CFNAI-MA3, declined to -0.42 in August from –0.27 in July. August’s CFNAI-MA3 suggests that growth in national economic activity was below its historical trend, according to a press release.
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With regard to inflation, the amount of economic slack reflected in the CFNAI-MA3 suggests subdued inflationary pressure from economic activity over the coming year.
Production-related indicators made a neutral contribution to the index in August, down from +0.23 in July. Manufacturing production edged up 0.2 percent in August after rising 0.7 percent in the previous month.
The sales, orders, and inventories category made a small negative contribution to the index in August, contributing -0.01, compared with +0.01 in July.
Employment-related indicators made a contribution of -0.12 to the index in August, down from +0.09 in July. Total nonfarm payroll employment decreased by 54,000 in August. In addition, manufacturing payrolls declined for the first time in eight months, decreasing by 27,000 in August after moving up 37,000 in the previous month.
The consumption and housing category contributed –0.40 to the index in August, up slightly from -0.44 in July. Housing starts increased to 598,000 annualized units in August from 541,000 in July, and building permits edged up to 569,000 annualized units in August from 559,000 in the previous month.
Thirty-four of the 85 individual indicators made positive contributions to the index in August, while 51 made negative contributions. Forty-two indicators improved from July to August, while 42 indicators deteriorated and one was unchanged. Of the indicators that improved, 19 made negative contributions.
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