Chicago Fed National Activity Index (CFNAI) Bounces Back Strongly in June

The Chicago Fed National Activity Index (CFNAI) bounced back to +0.43 in June from –0.45 in May, fueled by a strength in production, specifically manufacturing. Industrial production rose 0.6% in June after falling 0.5% in May, fueled by a strong rebound in manufacturing output.

Two of the four broad categories of indicators that make up the index increased from May, and three of the four categories made positive contributions to the index in June. The index’s three-month moving average, CFNAI-MA3, edged up to +0.16 in June from +0.10 in May.

The CFNAI Diffusion Index, which is also a three-month moving average, was unchanged at +0.15 in June. Forty-five of the 85 individual indicators made positive contributions to the CFNAI in June, while 40 made negative contributions. Forty-five indicators improved from May to June, while 40 indicators did not. Of the indicators that improved, 12 made negative contributions.

Production-related indicators contributed +0.36 to the CFNAI in June, after making a –0.56 contribution in May. Manufacturing industrial production increased 0.8% in June after declining 1.0% in May.

Employment-related indicators contributed +0.08 to the CFNAI in June, down slightly from +0.11 in May. Nonfarm payrolls increased by 213,000 in June after rising by 244,000 in May.

Worth noting, the CFNAI was constructed using only data available as of July 19, 2018. There were data sets for 51 of the 85 indicators published. Estimates were used for unavailable data to construct the index.