Chicago Fed: Economic Activity Weakened In August
Doug Short | Sep 25, 2012 12:53AM ET
According to the Chicago Fed's National Activity Index, August economic activity weakened from the previous month. The indicator and its 3-month moving average have been negative (meaning below-trend growth) for the past six months, and the data revisions have worsened the all-important 3-month moving average from last month's -0.26 to -0.47. Here are the opening paragraphs from the report:
Led by declines in production-related indicators, the Chicago Fed National Activity Index (CFNAI) decreased to -0.87 in August from -0.12 in July. All four broad categories of indicators that make up the index deteriorated from July, with each making a negative contribution to the index in August.
The index's three-month moving average, CFNAI-MA3, decreased from -0.26 in July to -0.47 in August—its lowest level since June 2011 and its sixth consecutive reading below zero. August's CFNAI-MA3 suggests that growth in national economic activity was below its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests subdued inflationary pressure from economic activity over the coming year.
The CFNAI Diffusion Index also moved lower in August, declining to -0.23 from -0.08 in July. Twenty-six of the 85 individual indicators made positive contributions to the CFNAI in August, while 59 made negative contributions. Twenty-nine indicators improved from July to August, while 55 indicators deteriorated and one was unchanged. Of the indicators that improved, 12 made negative contributions. [Understanding the CFNAI Components , which I update and post a few hours after the CFNAI is released.
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