The Chicago Fed National Activity Index (CFNAI) jumped +0.27 in December, up slightly from +0.21 in November and beating the +0.15 consensus forecast.
Without a doubt, the +1.1 jump in manufacturing within the production component was a major driver of the gain.
Two of the four broad categories of indicators that make up the index rose from November, while two of the four categories made positive contributions to the index in December.
The index’s three-month moving average, known as the CFNAI-MA3, also ticked up to +0.16 in December from +0.12 in November.
The CFNAI Diffusion Index, which is also a three-month moving average, rose +0.14 from +0.11 in November. Forty-six of the 85 individual indicators made positive contributions to the CFNAI in December, while 39 made negative contributions.
Forty indicators improved from November to December, while 44 indicators deteriorated and one was unchanged. Of the indicators that improved, ten made negative contributions.
Employment-related indicators contributed a steady +0.11 to the CFNAI in December, up slightly from +0.10 in November. Total nonfarm payrolls rose by 312,000 in December’s blockbuster jobs report, after increasing by a respectable 176,000 in the previous month.
H/T Chicago Federal Reserve:
The CFNAI is a weighted average of 85 existing monthly indicators of national economic 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.
The 85 economic indicators that are included in the CFNAI are drawn from four broad categories of data: production and income; employment, unemployment, and hours; personal consumption and housing; and sales, orders, and inventories. Each of these data series measures some aspect of overall macroeconomic activity. The derived index provides a single, summary measure of a factor common to these national economic data.
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