Chicago Fed Index Points to Slight Decrease in Economic Growth in March

The Chicago Fed National Activity Index (CFNAI) moved down to +0.44 in March from +0.54 in February. Three of the four broad categories of indicators used to construct the index made positive contributions in March, but two categories deteriorated from February. The index’s three-month moving average, CFNAI-MA3, increased to +0.57 in March from +0.43 in February.

The CFNAI Diffusion Index, which is also a three-month moving average, moved up to +0.45 in March from +0.31 in February. Fifty-nine of the 85 individual indicators made positive contributions to the CFNAI in March, while 26 made negative contributions. Thirty-eight indicators improved from February to March, while 47 indicators deteriorated. Of the indicators that improved, six made negative contributions.

Production-related indicators contributed +0.27 to the CFNAI in March, down slightly from +0.30 in February. Manufacturing industrial production moved up 0.9% in March after increasing 1.2% in February. The contribution of the sales, orders, and inventories category to the CFNAI moved up to +0.06 in March from –0.03 in the previous month.

Employment-related indicators contributed +0.16 to the CFNAI in March, down from +0.31 in February. Nonfarm payrolls increased by 431,000 in March after rising by 750,000 in February. The contribution of the personal consumption and housing category to the CFNAI was unchanged at –0.04 in March.

The CFNAI was constructed using data available as of April 21, 2022. At that time, March data for 51 of the 85 indicators had been published.

For all missing data, estimates were used in constructing the index. The February monthly index value was revised to +0.54 from an initial estimate of +0.51, and the January monthly index value was revised to +0.75 from last month’s estimate of +0.59. 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 February monthly index value was primarily due to the former, while the revision to the January monthly index value was primarily due to the latter.