US: Chicago Fed National Activity Index

Mon Feb 26 07:30:00 CST 2018

Consensus Consensus Range Actual Previous Revised
Level 0.20 0.20 to 0.30 0.12 0.27 0.14
3 Month Moving Average 0.17 0.42 0.43

Underpinned by employment, January was another solid month for the economy judging by the national activity index which held in moderately positive ground at 0.12 vs a downward revised 0.14 for December. The 3-month average, reflecting the rolling off the hurricane-rebound month of October, fell sharply but is still positive at 0.17.

The employment component, reflecting the strength of January's payroll growth of 200,000, was the strongest contributor to the latest month's index, at 0.09, followed by sales, orders & inventories at 0.07. Consumption & housing, reflecting weakness in the former that offset strength in the latter, was a marginal negative for the fourth month in a row while production, the result of another disappointing performance for manufacturing, was a marginal drag on the month.

This report helps highlight two of the most important features of the early 2018 economy: strength in employment and softness in consumer spending.

Market Consensus Before Announcement
Strength in mining and a burst in utility output helped drive the December national activity index to an unexpectedly strong 0.27 in an otherwise mostly flat report. The consensus for January's national activity index is 0.2.

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.