The Chicago Fed National Activity Index (CFNAI) increased to -0.04 in October, up from -0.29 in September. Two of the four broad categories of indicators that make up the index increased from September, but only one category made a positive contribution to the index in October.
The index’s three-month moving average, CFNAI-MA3, decreased to -0.20 in October from -0.03 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 -0.18 in October from -0.07 in September. Forty-one of the 85 individual indicators made positive contributions to the CFNAI in October, while 44 made negative contributions. Forty-six indicators improved from September to October, while 39 indicators deteriorated. Of the indicators that improved, 16 made negative contributions.
The contribution from production-related indicators to the CFNAI increased to -0.05 in October from -0.17 in September. Manufacturing production moved up 0.4 percent in October, following a decline of 0.1 percent in September. However, industrial production declined by 0.2 percent in October for the second straight month. The sales, orders, and inventories category made a contribution of -0.01 to the CFNAI in October, down slightly from +0.01 in September.
Employment-related indicators contributed +0.11 to the CFNAI in October, up from -0.06 in September. Nonfarm payrolls increased 271,000 in October after rising 137,000 in September, and the unemployment rate ticked down to 5 percent in October from 5.1 percent in the previous month.
The contribution of the personal consumption and housing category to the CFNAI ticked down to -0.09 in October from -0.07 in September. Housing starts declined to 1,060,000 annualized units in October from 1,191,000 in September. However, housing permits moved up to 1,150,000 annualized units in October from 1,105,000 in the previous month.
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