Fed’s National Activity Index Crashed In February

Based on 85 monthly individual factors, The Chicago Fed’s National Activity Index unexpectedly plunged in February. Against expectations of a +0.75 print, the data showed a -1.09 (a reading below 0 indicates below-trend growth in national economy).

Source: Bloomberg

This is the first decline since April 2020.

34 of the 85 monthly individual indicators made positive contributions, while 51 indicators affected the index negatively (led by declines in indicators related to production and personal consumption and housing).

Production-related indicators contributed –0.85 to the CFNAI in February, down from +0.37 in January. Adverse weather played a part in industrial production declining 2.2 percent in February, after rising 1.1 percent in January. The contribution of the sales, orders, and inventories category to the CFNAI edged down to +0.03 in February from +0.06 in January.

The personal consumption and housing category contributed –0.29 to the CFNAI in February, down from +0.27 in January. The indicators in this category broadly deteriorated from January. The contribution of the employment, unemployment, and hours category to the CFNAI edged down +0.02 in February from +0.04 in January. Notably, payrolls in construction and average weekly hours worked in manufacturing declined in February.

But, of course, none of that matters now that around $2 trillion of malarkey is about to wash away any anxiety (for now).