June 2009

The Chicago Fed National Activity Index was -2.30 in May, little changed from -2.27 in April. All four broad categories of indicators made negative contributions to the index in May.

The three-month moving average, CFNAI-MA3, was -2.67 in May, up slightly from -2.73 in the previous month. May’s CFNAI-MA3 suggests that growth in national economic activity was well below its historical trend. 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.

The small decrease in the index in May was primarily due to the production and income category of indicators. This category made a larger negative contribution to the index in May, -0.65, compared with its contribution in April, -0.47. …

The Chicago Fed Midwest Manufacturing Index (CFMMI) declined 3.1% in May, to a seasonally adjusted level of 78.2 (2002 = 100). Revised data show the index was down 1.4% in April, to 80.7.

The Federal Reserve Board’s industrial production index for manufacturing (IPMFG) was down 1.0% in May. Regional output in May declined 24.4% from a year earlier- lower than the 15.2% decrease in national output.

Regional auto sector production dropped 10.7% in May after declining 3.0% in April. The nation’s auto output was down 2.6% in May. The Midwest’s automotive output was down 39.2% in May relative to its year-ago value, and the nation’s auto output was down 22.0%. The troubles of the Detroit Three auto companies seem to be affecting Midwestern production much more than that of other areas …

New orders for manufactured durable goods in May increased $2.8 billion or 1.8% to $163.9 billion, the U.S. Census Bureau reported. This was the third increase in the last four months and followed a 1.8% April increase. Excluding transportation, new orders increased 1.1%. Excluding defense, new orders also increased 1.4%.

Shipments of manufactured durable goods in May, down ten consecutive months, decreased $3.6 billion or 2.1% to $169.9 billion. This was the longest streak of consecutive monthly decreases since the series was first published on a NAICS basis in 1992 and followed a 0.5% April decrease.

Unfilled Orders
Unfilled orders for manufactured durable goods in May, down eight consecutive months, decreased $2.0 billion or 0.3% to $747.5 billion. This followed a …

The broad improvement of the Leading Economic Index and the stabilization of the Coincident Economic Index suggest that the recession that began in the U.S. in December 2007 will likely ease in the near term, according to the latest report from The Conference Board.

The LEI increased sharply for the second consecutive month in May, increasing 1.2%. Seven of the ten indicators that make up the LEI posted increases. The index rose 1.2% (a 2.4% annual rate) between November 2008 and May 2009, the first time the index has increased over a six-month period since July 2007. The LEI currently stands at 100.2 (2004=100).

The CEI continued to decrease in May, falling 0.2% amid further declines in industrial production and employment. However, two of the four indicators showed improvement. …

Manufacturers and wholesalers are starting to see positive signs for economic recovery, according to the third annual RSM McGladrey Manufacturing and Wholesale Distribution National Survey. Respondents to the survey say they expect their companies to rebound from the current recession beginning in late 2009 (46%) and early 2010 (44%). In general, companies predict an earlier rebound for their own businesses than for their industry or the U.S. economy.

Survey results indicate a significant year-over-year decline in the reported health of companies, however. Forty percent of respondents reported their business as "declining" this year, as compares to 12% in 2008. Only 9% reported their companies as "thriving and growing."

More than 920 manufacturing and wholesale distribution …