|Level||0.30||0.0 to 0.50||0.08||0.34||0.27|
|3 Month Moving Average||0.03||0.25||0.16|
The 2 tenths fall in the March unemployment rate and surge in the month's utility output helped offset weak payroll growth and a sharp drop in manufacturing production to make for a slightly positive reading in the national activity index, at 0.08. Employment, on the back of the unemployment rate, contributed 0.02 to March's total with production also slightly positive, at 0.04. Sales, orders & inventories, underpined by great strength in the ISM new orders index, added 0.07 to March while personal consumption & housing pulled the headline down 0.05 as a sharp drop in housing starts offset a rise in permits. These results help confirm that March was a slow month for the economy and will be a weak contributor -- but perhaps still a positive contributor -- to first-quarter economic growth.
Market Consensus Before Announcement
The national activity index continues to run just under historical trend with production the recent weak link and personal consumption & housing no help. Forecasters see the index, boosted in part by March's utility output, in the plus column at 0.3.
The Chicago Fed National Activity Index (CFNAI) is a monthly index that tracks overall economic activity and inflationary pressures. 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 over time, a positive index reading corresponds to growth above trend and a negative index reading corresponds to growth below trend.
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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