The Chicago Fed National Activity Index (CFNAI) increased to -0.08 in October from -0.23 in September. All four broad categories of indicators that make up the index increased from September, but all four categories again made nonpositive contributions to the index in October.
The index’s three-month moving average, CFNAI-MA3, edged down to -0.27 in October from -0.20 in September. October’s CFNAI-MA3 suggests that growth in national economic activity was somewhat below 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, which is also a three-month moving average, decreased to -0.35 in October from -0.16 in September. Thirty-four of the 85 individual indicators made positive contributions to the CFNAI in October, while 51 made negative contributions. Fifty indicators improved from September to October, while thirty-four indicators deteriorated and one was unchanged. Of the indicators that improved, 21 made negative contributions.
The contribution from production-related indicators to the CFNAI rose to -0.04 in October from -0.10 in September. Total industrial production was unchanged in October after decreasing 0.2 percent in September; and manufacturing industrial production increased by 0.2 percent for the second straight month in October. The sales, orders, and inventories category made a contribution of -0.01 to the CFNAI in October, up from -0.03 in September.
Employment-related indicators made a neutral contribution to the CFNAI in October, up slightly from -0.01 in September. The civilian unemployment rate fell to 4.9 percent in October from 5.0 percent in September; but nonfarm payrolls increased by 161,000 in October after increasing by 191,000 in the previous month.
The contribution of the personal consumption and housing category to the CFNAI rose to -0.03 in October from -0.09 in September. Housing starts increased to 1,323,000 annualized units in October from 1,054,000 in September; and housing permits ticked up to 1,229,000 annualized units in October from 1,225,000 in the previous month.
The CFNAI was constructed using data available as of November 17, 2016. At that time, October data for 50 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The September monthly index value was revised to -0.23 from an initial estimate of -0.14, and the August monthly index value was revised to -0.52 from last month’s estimate of -0.72. Revisions to the monthly index value 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 revisions to the September and August monthly index values were due to both factors almost equally.
