Led by declines in employment- and production-related indicators, the Chicago Fed National Activity Index decreased to -0.18 in October from 0.18 in September. Three of the four broad categories of indicators that make up the index decreased from September, and only one of the four categories made a positive contribution to the index in October.
The index’s three-month moving average, CFNAI-MA3, increased to 0.06 in October from -0.02 in September, marking its first positive reading in eight months. October’s CFNAI-MA3 suggests that growth in national economic activity was near 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 increased to 0.21 in October from 0.07 in September. Forty-one of the 85 individual indicators made positive contributions to the CFNAI in October, while 44 made negative contributions. Forty-four indicators improved from September to October, while 40 indicators deteriorated and one was unchanged. Of the indicators that improved, 12 made negative contributions.
Employment-related indicators contributed -0.05 to the CFNAI in October, down from 0.11 in September. Average weekly initial unemployment insurance claims increased to 349,600 in October from 304,900 in September, and the unemployment rate ticked up to 7.3 percent in October from 7.2 percent in the previous month.
Production-related indicators contributed -0.01 to the CFNAI in October, down from 0.19 in September. Industrial production decreased 0.1 percent in October after increasing 0.7 percent in September. The contribution from the sales, orders and inventories category to the CFNAI decreased to 0.03 in October from 0.07 in September.
The contribution from the consumption and housing category to the CFNAI moved up to -0.15 in October from -0.18 in September. Housing permits increased to 1,034,000 annualized units in October from 974,000 in September.
The U.S. Census Bureau has not yet released housing starts data for September and October.
