Led by improvements in employment-related indicators, the Chicago Fed National Activity Index increased to +0.34 in February from –0.02 in January. All four broad categories of indicators that make up the index increased from January, and only one of the four categories made a negative contribution to the index in February.
The index’s three-month moving average, CFNAI-MA3, improved to +0.25 in February from +0.07 in January, reaching its highest level since December 2014. February’s CFNAI-MA3 suggests that growth in national economic activity was somewhat above 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, which is also a three-month moving average, moved up to +0.17 in February from +0.02 in January. Fifty-five of the 85 individual indicators made positive contributions to the CFNAI in February, while 30 made negative contributions. Sixty-three indicators improved from January to February, while 22 indicators deteriorated. Of the indicators that improved, 15 made negative contributions.
The contribution from production-related indicators to the CFNAI edged up to +0.09 in February from +0.04 in January. Manufacturing production increased 0.5 percent for the second consecutive month in February, while total industrial production was unchanged in February after decreasing by 0.1 percent in January. The sales, orders, and inventories category made a contribution of +0.08 to the CFNAI in February, up from –0.01 in January. The Institute for Supply Management’s Manufacturing Purchasing Managers’ New Orders Index increased to 65.1 in February from 60.4 in January.
Employment-related indicators contributed +0.21 to the CFNAI in February, up from +0.06 in January. The civilian unemployment rate edged down to 4.7 percent in February from 4.8 percent in January; and civilian nonagricultural employment increased by 444,000 in February, following a decrease of 229,000 in the previous month.
The contribution of the personal consumption and housing category to the CFNAI increased to –0.03 in February from –0.11 in January. Housing starts increased to 1,288,000 annualized units in February from 1,251,000 in January, but housing permits decreased to 1,213,000 annualized units in February from 1,293,000 in the previous month.
