February Chicago Fed National Activity Index Rises 0.34, employment surges

The Chicago Fed National Activity Index (CFNAI) increased 0.34 in February following a revised 0.02 decline for January which was originally reported as a 0.05 decline.

The 3-month moving average strengthened to 0.25 from 0.07 previously and this was the highest level since December 2014.

Employment-related indicators contributed 0.21 to the overall index in February from 0.06 in January as the number of people reported as employed increased sharply.

Production-related indicators contributed 0.09 from 0.04 previously with support from a second successive 0.5% increase in manufacturing production.

The sales, orders and inventories component was also positive at 0.08 from -0.01 in January, but the personal consumption and housing category held in negative territory at -0.03 from -0.11 previously.

Any strengthening in the index to above 0.70 following a prolonged period of economic expansion suggests that a period of sustained increasing inflation has begun, but the index held comfortably below this level which suggests only a small increase in inflation is likely.

Overall, the indicator was pushed higher primarily by the impact of a sharp increase of 444,000 in the number of employed people in the February household employment report released as part of the non-farm payrolls data. This increase followed a reported decline the previous month and the index jump in December also reflected a sharp increase in the number of people reported as employed.

Without this component, the index would have registered only a small monthly improvement and the data overall suggests moderate growth in the economy with underlying consumer spending relatively subdued.

Chicago Fed National Activity Index (CFNAI)cfnai


Tim is a contributing author to EconomicCalendar.com. He is an economist and has been involved in financial markets for over 20 years as an analyst. He specialises in global economic trends, macro policy and central banks. Extensive knowledge, experience and data mining is used to anticipate trends in equities, bonds and forex with a contrarian slant. He is a graduate of the University of York with a degree in Economics/Econometrics.