Chicago Fed National Activity Index points to an increase in economic growth in November

Led by improvements in production-related indicators, the Chicago Fed National
Activity Index (CFNAI) increased to +0.22 in November from a neutral reading in
October. Two of the four broad categories of indicators that make up the index
increased from October, and three of the four categories made positive contributions to the index in November. The index’s three-month moving average, CFNAI-MA3, moved down to +0.12 in November from +0.23 in October.

The CFNAI Diffusion Index, which is also a three-month moving average, decreased to +0.06 in November from +0.21 in October. Forty-eight of the 85 individual indicators made positive contributions to the CFNAI in November, while 37 made negative contributions. Forty-five indicators improved from October to November, while 37 indicators deteriorated and three were unchanged. Of the indicators that improved, 11 made negative contributions.

The contribution from production-related indicators to the CFNAI increased to +0.08 in November from –0.09 in October. Industrial production rose 0.6 percent in November after decreasing 0.2 percent in October. The contribution from the sales, orders, and inventories category to the CFNAI moved up to +0.09 in November
from –0.02 in October. The Institute for Supply Management’s Manufacturing New Orders Index increased to 62.1 in November from 57.4 in October.

Employment-related indicators contributed +0.10 to the CFNAI in November, down from +0.15 in October. Total nonfarm payrolls increased by 155,000 in November after rising by 237,000 in the previous month. The contribution of the personal consumption and housing category to the CFNAI ticked down to –0.05 in November from –0.04 in October. On balance, consumption and housing indicators weakened slightly from October.

The CFNAI was constructed using data available as of December 20, 2018. At that time, November data for 51 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The October monthly index value was revised to 0.00 from an initial estimate of +0.24, and the September monthly index value was revised to +0.15 from last month’s estimate of +0.14.
Revisions to the monthly index can be attributed to two main factors: revisions in previously published data and differences between the estimates of previously unavailable data and subsequently published data. The revision to the October monthly index value was primarily due to the former, while the revision to the September monthly index value was primarily due to the latter.


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Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya