The Chicago Fed National Activity Index (CFNAI) increased to 0.14 in August from -0.43 in July. All four broad categories of indicators that make up the index increased from July, and three of the four categories made positive contributions to the index in August.
The index’s three-month moving average, CFNAI-MA3, increased to -0.18 in August from -0.24 in July, marking its sixth consecutive reading below zero. August’s CFNAI-MA3 suggests that growth in national economic activity was 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 increased to -0.1 in August from -0.16 in July. Forty-eight of the 85 individual indicators made positive contributions to the CFNAI in August, while 37 made negative contributions. Fifty-two indicators improved from July to August, while 33 indicators deteriorated. Of the indicators that improved, 18 made negative contributions.
Production-related indicators contributed 0.22 to the CFNAI in August, up significantly from -0.2 in July. Manufacturing production increased 0.7 percent in August after decreasing 0.4 percent in July, and manufacturing capacity utilization increased to 76.1 percent in August from 75.7 percent in July.
The contribution from the sales, orders and inventories category to the CFNAI increased to 0.07 in August from -0.03 in July. The Institute for Supply Management’s Manufacturing Purchasing Managers’ New Orders Index rose to 63.2 in August from 58.3 in July.
Employment-related indicators contributed 0.02 to the CFNAI in August, up from -0.03 in July. Nonfarm payrolls rose by 169,000 in August after increasing by 104,000 in July. Average weekly initial unemployment claims decreased to 328,700 in August from 341,700 in July, and the unemployment rate ticked down to 7.3 percent in August from 7.4 percent in the previous month.
The contribution from the consumption and housing category to the CFNAI ticked up to -0.17 in August from -0.18 in July.
Housing starts rose to 891,000 annualized units in August from 883,000 in July, but housing permits decreased to 918,000 annualized units in August from 954,000 in the previous month.
