US Chicago Fed National Activity Index Nov: 0.37 (exp 0.40; R prev 0.75) - CFNAI decelerates but remains firmly positive - Neil's Summary

US Chicago Fed National Activity Index Nov: 0.37 (exp 0.40; R prev 0.75)

Chicago Fed National Activity Index (CFNAI) - Federal Reserve Bank of Chicago



The reason I like the CFNAI is that it gives a good distillation of a lot of inputs (85 total) from several different areas across the US economy (this is a national indicator) which we'll go through below.

Following a strong October (by +0.75), the Chicago Fed National Activity Index decelerated but remained in positive territory increasing +0.37 just below estimates for an increase of +0.40.  The three month moving average moved higher to +0.35 from +0.18.  53 of 85 individual components were positive (down from 61 last month) with 32 improving from September (down from 58) while 32 deteriorated (up from 26).  Three of four categories made positive contributions with the only negative being personal consumption/housing which contracted mildly.  All four though declined from October levels.  So, the economy remains in a good place according to this indicator but some softening from a very strong October.

As a reminder, the CNFAI doesn't have any "new" data - it is just a compilation of other reports that have been released (or estimates for reports that hasn't been released yet).  But since all of the data is not available at the time of the initial report, and as this is subject to being revised as the underlying reports are revised, I like to look back at revisions, which are little changed for this report (October was revised down to 0.75 from 0.76).  For this report data was through reports as of Dec 20th.  As of that date, data on 51 of the 85 indicators had been published.

From the report:

Led by slower growth in production-related indicators, the Chicago Fed National Activity Index (CFNAI) decreased to +0.37 in November from +0.75 in October. Three of the four broad categories of indicators used to construct the index made positive contributions in November, but all four categories deteriorated from October. 
 
The index’s three-month moving average, CFNAI-MA3, moved up to +0.37 in November from +0.25 in October. The CFNAI Diffusion Index, which is also a three-month moving average, increased to +0.35 in November from +0.18 in October. Fifty-three of the 85 individual indicators made positive contributions to the CFNAI in November, while 32 made negative contributions. Thirty-two indicators improved from October to November, while 53 indicators deteriorated. Of the indicators that improved, ten made negative contributions

In terms of the sector breakdowns (language from the report, bold is mine):
Production-related indicators contributed +0.21 to the CFNAI in November, down from +0.42 in October. Industrial production increased 0.5 percent in November after rising 1.7 percent in the previous month. The contribution of the sales, orders, and inventories category to the CFNAI edged down to +0.03 in November from +0.06 in October. Employment-related indicators contributed +0.18 to the CFNAI in November, down slightly from +0.23 in October. Nonfarm payrolls increased by 210,000 in November after rising by 546,000 in October, but the unemployment rate decreased to 4.2 percent in November from 4.6 percent in the previous month. The contribution of the personal consumption and housing category to the CFNAI moved down to –0.05 in November from +0.04 in October. On balance, consumption indicators weakened from October, pushing down the category’s overall contribution in November

To see more content, including summaries of most major U.S. economic reports and my morning and nightly updates go to https://seekingalpha.com/user/15085872/instablogs for more recent or https://sethiassociates.blogspot.com for the full history.

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