The Chicago Fed’s National Activity Index (CFNAI) was a reading of -0.21 in August, down from July’s revised reading of +0.26. The negative figure indicates that the index is below its historical trend. The index’s 3-month moving average is at +0.07.
45 of the 85 individual indicators made positive contributions to the CFNAI in July, while 40 made negative contributions. 42 indicators improved from July to August, while 43 indicators deteriorated. Of the indicators that improved, 12 made negative contributions.
The total index was dragged down by the Production and Income component which registered -0.17 from +0.24 in July. Employment and Hours was an even 0.00 from +0.10, Personal Consumption and Housing was -0.12 from -0.13, and Sales, Orders, and Inventories was +0.08 from +0.04.
The CFNAI is a weighted average of 85 indicators of national economic activity drawn from four broad categories of data: 1) production and income; 2) employment, unemployment, and hours; 3) personal consumption and housing; and 4) sales, orders, and inventories. Each of these data series measures some aspect of overall macroeconomic activity.
It is constructed to have an average value of zero and a standard deviation of one. Since economic activity tends toward trend growth rate over time, a positive index reading corresponds to growth above trend and a negative index reading corresponds to growth below trend.