National Activity Index Unexpectedly Tumbled In October, Chicago Fed Warns

Led by declines in production-related indicators, the Chicago Fed National Activity Index (CFNAI) tumbled to -0.49 (below 0 meaning below-trend growth), well below expectations of 0.0 and September’s -0.02 print.

Source: Bloomberg

Only 24 of the 85 individual indicators made positive contributions to the CFNAI in October, while 61 made negative contributions.

The overall trend of CFNAI is clear…

Source: Bloomberg

The slump was broad-based with all four broad categories of indicators used to construct the index decreased from September, and all four categories made negative contributions in October.

• Production-related indicators contributed –0.33 to the CFNAI in October, down from –0.04 in September.

• The contribution of the sales, orders, and inventories category to the CFNAI edged down to –0.04 in October from a neutral value in September.

• Employment-related indicators contributed –0.10 to the CFNAI in October, down from +0.01 in September.

• The contribution of the personal consumption and housing category to the CFNAI ticked down to –0.02 in October from a neutral value in September.

As The Chicago Fed concludes, the index suggests economic growth declined in October.

Doesn’t sound very ‘Goldilocks’ to us.