Led by declines in production- and employment-related indicators, the Chicago Fed National Activity Index decreased to -0.23 in March from 0.76 in February. Three of the four broad categories of indicators that make up the index decreased from February, and only one of the four categories made a positive contribution to the index in March.
The index’s three-month moving average, CFNAI-MA3, decreased to -0.01 in March from 0.12 in February. March’s CFNAI-MA3 suggests that growth in national economic activity was very near 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 moved down to -0.02 in March from 0.13 in February. Twenty-eight of the 85 individual indicators made positive contributions to the CFNAI in March, while 57 made negative contributions. Fifteen indicators improved from February to March, while 70 indicators deteriorated. Of the indicators that improved, six made negative contributions.
Production-related indicators contributed 0.01 to the CFNAI in March, down from 0.47 in February. Manufacturing production decreased 0.1 percent in March after increasing 0.9 percent in February, and manufacturing capacity utilization edged down to 76.4 percent in March from 76.6 percent in the previous month.
Employment-related indicators contributed -0.06 to the CFNAI in March, down from 0.31 in February. While the unemployment rate decreased to 7.6 percent in March from 7.7 percent in February, nonfarm payrolls rose by just 88,000 in March after increasing by 268,000 in February. The contribution from the sales, orders, and inventories category to the CFNAI in March was also negative, moving down to -0.02 from 0.13 in February.
The contribution from the consumption and housing category to the CFNAI remained at -0.14 in March. While housing starts increased to 1,036,000 annualized units in March from 968,000 in February, housing permits decreased to 902,000 annualized units in March from 939,000 in the previous month.
The February monthly index was revised to 0.76 from an initial estimate of 0.44.
