US: Chicago Fed National Activity Index

Mon Mar 26 07:30:00 CDT 2018

Consensus Consensus Range Actual Previous Revised
Level 0.05 0.05 to 0.20 0.88 0.12 0.02
3 Month Moving Average 0.37 0.17 0.16

A jump in industrial production fueled a sharp rise in the national activity index, at 0.88 in February vs a revised plus 0.02 in January.

Contributing 0.50 to February's index was the production component with the employment component also strongly positive, at 0.31. The component for sales, orders, and inventories made a contribution of 0.09, reflecting ISM indications for an inventory build, while the downward pull from the only negative component, personal consumption & housing, eased to minus 0.02 from minus 0.10. The decline here largely reflects a falloff in housing starts.

But today's report in sum is very positive and, with the 3-month average gaining strength at 0.37, hints at factory-led strength for the first quarter.

Market Consensus Before Announcement
Strength in both mining and manufacturing production as well as strong job growth are likely to offset softness in consumption and housing to help February's national activity index stay positive at 0.05 vs January's 0.12

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.