The 2020 Mid-Year Economic Update_long

Chicago Fed National Activity Index Falls in April

Three of four broad categories of indicators decreased from March.

Led by declines in production-related indicators, the Chicago Fed National Activity Index decreased to -0.53 in April from -0.23 in March. Three of the four broad categories of indicators that make up the index decreased from March, and none of the categories made a positive contribution to the index in April.

The index’s three-month moving average, CFNAI-MA3, ticked up to -0.04 in April from -0.05 in March. April’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 increased to -0.03 in April from -0.04 in March. Thirty-two of the 85 individual indicators made positive contributions to the CFNAI in April, while 53 made negative contributions. Forty-four indicators improved from March to April, while 41 indicators deteriorated. Of the indicators that improved, 18 made negative contributions.

Production-related indicators contributed -0.34 to the CFNAI in April, down from -0.04 in March. Industrial production declined 0.5 percent in April after increasing 0.3 percent in March, and manufacturing production decreased 0.4 percent in April after moving down 0.3 percent in the previous month.

Employment-related indicators made a neutral contribution to the CFNAI in April, down from an increase of 0.01 in March. While the unemployment rate decreased slightly in April, growth in nonfarm payrolls made a neutral contribution to the employment, unemployment and hours category for the second straight month.

The sales, orders and inventories category contributed -0.01 to the CFNAI in April, up from -0.04 in March. The consumption and housing category contributed -0.17 to the CFNAI in April, down slightly from -0.15 in March. Housing starts decreased to 853,000 annualized units in April from 1,021,000 in March, although housing permits increased to 1,017,000 annualized units in April from 890,000 in the previous month.

The March monthly index was unchanged at -0.23 after data revisions.

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