Led by improvements in production-related and employment-related indicators, the Chicago Fed National Activity Index increased to -0.32 in November, up sharply from -1.02 in October. Two of the four broad categories of indicators that make up the index improved, although only the production and income category made a positive contribution.
The index’s three-month moving average, CFNAI-MA3, increased to -0.77 in November from -0.87 in October. November’s CFNAI-MA3 suggests that growth in national economic activity was below its historical trend. The level of activity, however, remained in a range that has historically been consistent with the early stages of a recovery following a recession. With regard to inflation, the amount of economic slack reflected in the CFNAI-MA3 indicates low inflationary pressure from economic activity over the coming year.
Production-related indicators made a contribution of 0.35 to the index in November, compared with -0.09 in October. This contribution accounted for much of the improvement in the index in November. Industrial production rose 0.8 percent in November after being unchanged in October; and manufacturing production increased 1.1 percent in November after decreasing 0.2 percent in the previous month. Furthermore, manufacturing capacity utilization increased to 68.4 percent in November from 67.6 percent in October.
Employment-related indicators made a contribution of -0.12 to the index in November, up from -0.42 in October. Initial unemployment insurance claims in November declined to their lowest level during the past year; and the unemployment rate edged down to 10.0 percent in November from 10.2 percent in the previous month. In addition, payroll employment decreased by 11,000 in November after declining by 111,000 in October; and average weekly hours worked in manufacturing increased to 40.4 in November from 40.1 in the previous month.
The consumption and housing category’s contribution to the index was -0.48 in November, roughly unchanged from its value in October. The sales, orders, and inventories category made a contribution of -0.07 in November, down slightly from -0.02 in October.
Thirty-six of the 85 individual indicators made positive contributions to the index in November, while 49 made negative contributions. Fifty-three indicators improved from October to November, while 32 indicators deteriorated. Of the indicators that improved, 27 made negative contributions. The index was constructed using data available as of Dec. 17, 2009. At that time, November data for 52 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index.
The October monthly index was revised to -1.02 from an initial estimate of -1.08. 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 slight upward revision to the October monthly index was due primarily to revisions in previously published data.
