May Chicago Fed Nat’l Activity Index drops as production slows

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The Chicago Fed National Activity Index for May decreased to negative 0.15 from an upwardly revised positive 0.42 in April, while the three-month moving average (CFNAI-MA3) declined to 0.18 from an upwardly revised 0.48, the Federal Reserve Bank of Chicago reported Monday.

The CFNAI for April was originally reported as 0.34, while the CFNAI-MA3 was 0.46 in the first read.

In May 2017, the index was negative 0.19, while the CFNAI-MA3 was positive 0.10 in that month.

The CFNAI diffusion index, also a three-month moving average, slid to 0.10 from an unrevised 0.23. A year ago, the diffusion index was positive 0.04.

The production indicators subtracted 0.29 from CFNAI in the month (compared to a contribution of 0.33 in the previous month), while employment-related indicators contributed 0.13 to the index in the month, after a 0.12 contribution in April, the Fed said.

Personal consumption and housing-related data subtracted 0.04 in the month, after taking 0.03 off the index in the prior month, while sales, orders and inventories added 0.05 in the month after a neutral contribution the month before.

The index is a weighted average of 85 indicators of national economic activity. A zero value for the index indicates that the national economy is expanding at its historical trend rate of growth; negative values are associated with below-trend growth while positive values indicate above-trend growth.

The index was constructed using data available by June 21, with data for 51 of the 85 indicators having been published by then. The Fed said it used estimates for the missing data.

Overall, 39 of the 85 indicators made positive contributions to the index in the month and 46 made negative contributions. While 43 indicators were better than the previous month, 17 of these still made negative contributions to the index. Also, 42 deteriorated from April to May.

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Economic indicators Manufacturing industry Federal Reserve Bank of Chicago