Led by improvements in production- and employment-related indicators, the Chicago Fed National Activity Index increased to +0.17 in December from -0.46 in November. Two of the four broad categories of indicators that make up the index improved from November, and only the consumption and housing category’s contribution remained negative in December.
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The index’s three-month moving average, CFNAI-MA3, increased from -0.19 in November to -0.08 in December – its highest value since March 2011. December’s CFNAI-MA3 suggests that growth in national economic activity was slightly below its historical trend. The economic slack reflected in this level of the CFNAI-MA3 suggests limited inflationary pressure from economic activity over the coming year.
The contribution from production-related indicators to the index rose sharply to +0.24 in December from -0.28 in November. Industrial production increased 0.4 percent in December after edging down 0.3 percent in the previous month. Similarly, manufacturing production rose by 0.9 percent in December after declining by 0.4 percent in November, and manufacturing capacity utilization increased to 75.9 percent in December from 75.3 percent in the previous month.
