The September Chicago Fed Index is out, and once again it shows the economy weakening.
Here’s how the decline is characterised. Note production is weak, but sales and orders are OK.
Led by declines in production-related indicators, the Chicago Fed National Activity Index decreased to –0.58 in September from –0.49 in August. Three of the four broad categories of indicators that make up the index slightly improved from August, but only the sales, orders, and inventories category made a positive contribution to the index in September.
The index’s three-month moving average, CFNAI-MA3, ticked down to –0.33 in September from –0.32 in August. September’s CFNAI-MA3 suggests that growth in national economic activity was below its historical trend. With regard to inflation, the amount of economic slack reflected in the CFNAI-MA3 suggests subdued inflationary pressure from economic activity over the coming year.
The consumption and housing category contributed –0.39 to the index in September, up slightly from –0.40 in the previous month. Housing starts edged up to 610,000 annualized units in September from 608,000 in August, while building permits decreased to 539,000 annualized units in September from 571,000 in the previous month.