Led by improvements in production-related and employment-related indicators, the Chicago Fed National Activity Index increased to –0.32 in November, up sharply from –1.02 in October. Two of the four broad categories of indicators that make up the index improved, although only the production and income category made a positive contribution.
The index’s three-month moving average, CFNAI-MA3, increased to –0.77 in November from –0.87 in October (see chart above). November’s CFNAI-MA3 suggests that growth in national economic activity was below its historical trend, but the level of activity remained in a range that has historically been consistent with the early stages of a recovery following a recession. With regard to inflation, the amount of economic slack reflected in the CFNAI-MA3 indicates low inflationary pressure from economic activity over the coming year.
Production-related indicators made a contribution of +0.35 to the index in November, compared with –0.09 in October. This contribution accounted for much of the improvement in the index in November. Industrial production rose 0.8 percent in November after being unchanged in October; and manufacturing production increased 1.1percent in November after decreasing 0.2 percent in the previous month. Furthermore, manufacturing capacity utilization increased to 68.4 percent in November from 67.6 percent in October.