Chicago Fed's National Activity Index Rebounds In June

The Chicago Federal Reserve’s National Activity Index rebounded in June, with three of the four broad categories of indicators making positive contributions.

The Chicago Fed said Wednesday its CFNAI came in at 0.34 last month, up from -0.14 in May. The three-month moving average was 0.11 in June, the same as in May. (A reading above zero is associated with above-trend economic growth.)

The monthly CFNAI  is a weighted average of 85 indicators of national economic activity, drawn from four major categories: 1) production and income; 2) employment, unemployment and hours; 3) personal consumption and housing; and 4) sales, orders and inventories.

Production-related indicators made a contribution of 0.27 to the index in June, on the heels of a -0.07 contribution in May. Manufacturing capacity utilization increased to 81.1 in June from 80.7 in May, the Chicago Fed noted, while total industrial production rose 0.8 percent after 0.1 percent rise the previous month.

Consumption and housing indicators made a contribution of 0.06 in June, as housing starts fell 5.3 percent and residential building permits dropped by 4.3 percent. Both measures, however, remained above historical norms and continue to make positive contributions to the CFNAI.

The sales, orders, and inventories category made a contribution of 0.02 to the June CFNAI.

The Chicago Fed said employment-related indicators made a small negative contribution, and the bank said 57 of the 85 individual indictors made positive contributions in June, 27 made negative contributions, and one was neutral. Fifty-four indicators improved from May, although 12 made below-average contributions to the index in June.