Unfortunately, the index showed that economic growth decelerated in August. That was led by declines in indicators tied to production. This CFNAI reading fell to -0.21 in August from a positive 0.26 in July. The consensus reading from Bloomberg was 0.35 for August, indicating that things went south in a hurry. We would also point out that July’s 0.26 reading was revised down from a prior 0.39.
The Chicago Fed showed that two of the four broad categories of indicators that make up the index decreased from July, and two of the four categories made negative contributions to the index in August.
The release said:
The index’s three-month moving average decreased to +0.07 in August from +0.20 in July, marking its sixth consecutive reading above zero. August’s CFNAI-MA3 suggests that growth in national economic activity was somewhat above its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests limited inflationary pressure from economic activity over the coming year. The CFNAI Diffusion Index, which is also a three-month moving average, decreased to +0.14 in August from +0.23 in July. Forty-five of the 85 individual indicators made positive contributions to the CFNAI in August, while 40 made negative contributions. Forty-two indicators improved from July to August, while 43 indicators deteriorated. Of the indicators that improved, 12 made negative contributions.
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