|Level||-0.05||-0.45 to 0.25||-0.37||-0.41||-0.39|
|3 Month Moving Average||-0.09||0.01||0.01|
September was a weak month across the economy. The national activity index came in at minus 0.37, a negative score that points to lower-than-average economic growth for the month. Production is the weakest component in the report, down 0.18 and reflecting in part export troubles in manufacturing. Sales/orders/inventories are at zero while the personal consumption & housing component is at minus 0.08. Employment is also in the negative column, at minus 0.11.
Weakness in September followed similar weakness in August where the index is at a revised minus 0.39. The 3-month average is at minus 0.09, down from plus 0.01 in August. This report is a reminder that, as long as economic data are weak, the doves can hold sway in the FOMC.
Market Consensus Before Announcement
September wasn't a great month for the economy, at least not for employment or for the factory sector. The national activity index is expected to slip but only fractionally, at a consensus minus 0.05 which would point to only slightly below average growth in the month.
The Chicago Fed National Activity Index (CFNAI) is a monthly index designed to better gauge overall economic activity and inflationary pressure. The CFNAI is released at 8:30 a.m. E.T. normally toward the end of each calendar month. The CFNAI is a weighted average of 85 existing monthly indicators of national economic activity. It is constructed to have an average value of zero and a standard deviation of one. Since economic activity tends toward trend growth rate over time, a positive index reading corresponds to growth above trend and a negative index reading corresponds to growth below trend.
The 85 economic indicators that are included in the CFNAI are drawn from four broad categories of data: production and income; employment, unemployment, and hours; personal consumption and housing; and sales, orders, and inventories. Each of these data series measures some aspect of overall macroeconomic activity. The derived index provides a single, summary measure of a factor common to these national economic data.
This index is unique among regional Federal Reserve Bank indexes in that it is national in scope. Investors are eager to have insight into economic growth and inflation. This index combines 85 diverse and already released indicators from four broad categories -- production and income; employment, unemployment, and hours; personal consumption and housing; and sales, orders, and inventories -- into an overall index to measure economic performance. The index provides another measure with which investors can measure overall growth.
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