Chicago Fed National Activity index improves in September, but still below trend

The Federal Reserve Bank of Chicago released the Chicago Fed National Activity Index (CFNAI) for September on Monday which is one of the last national growth and business reports ahead of Friday’s gross domestic product (GDP) report. Chicago Fed National Activity Index rose to −0.14 in September from at −0.72 in August.

Details of the report showed that all four broad categories of indicators that make up the index increased in September but still made negative contributions to the index for the second straight month.

Factory production, employment, housing and consumer spending, as well as the business orders that make up the index improved from a particularly weak August. The September reading still shows U.S. economic growth running below its potential.

The index’s three-month moving average, which tends to offer a clearer picture of the trend in economic activity weakened further to negative 0.21 in September from negative 0.14 in August, a sign that U.S. inflation could be contained over the coming year.   

“The economic growth reflected in this level [September three-month moving average] suggests subdued inflationary pressure from economic activity over the coming year,” the Chicago Fed said in its release.