US: Chicago Fed National Activity Index

Thu Dec 21 07:30:00 CST 2017

Consensus Consensus Range Actual Previous Revised
Level 0.20 0.05 to 0.40 0.15 0.65 0.76
3 Month Moving Average 0.41 0.28 0.31

November was once again a strong month for the national activity index, at 0.15 vs an outsized and upwardly revised gain of 0.76 in October. The difference between the two months is manufacturing production, which surged in a hurricane-effect for October than slowed to only modest growth in November. Indications in fact are solid with employment adding 0.11 to the index in both months and with sales, orders, and inventories adding 0.05 and 0.04 in November and October respectively. The consumer and housing component subtracted slightly more in November, at minus 0.06 reflecting however a decline in building permits that has since reversed. The economy is definitely solid based on this index which, after a very soft year, began to show real life in September.

Market Consensus Before Announcement
Upward reversals from hurricane effects gave a big lift to October's national activity index which jumped nearly 1/2 point to 0.65 for a new expansion high. For November, retail sales were strong but industrial production was soft. Econoday's consensus for November is plus 0.20.

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.