By Xavier Fontdegloria
The U.S. economy picked up pace in January after a weak end of the year, according to data from the Federal Reserve Bank of Chicago released Thursday.
The Chicago Fed National Activity Index increased to 0.23 from minus 0.46 in December, in a sign that the economy grew above its historical average trend.
The CFNAI index, designed to gauge overall economic activity and inflationary pressures, is composed of 85 economic indicators from four broad categories of data: production and income; employment, unemployment and hours; personal consumption and housing; and sales, orders and inventories. A positive value for the monthly index is associated with the economy growing above its average trend.
The main positive contributor to the index were indicators from personal consumption and housing. This category contributed 0.13 to the index, swinging from a minus 0.06 in December.
Employment-related indicators also were positive, contributing 0.12 to the index, up from 0.09 the previous month, boosted by a lower unemployment rate and increasing payrolls.
Production-related indicators contributed 0.04 in January, rebounding from minus 0.56 in December, as industrial production stabilized after declining the prior month.
Sales, orders and inventories were the only broad category which dragged the overall index, by minus 0.06 in January from 0.07 in December.
The CFNAI diffusion index rose to minus 0.10 in January from minus 0.15 a month earlier. The index’s three-month moving average, the CFNAI-MA3, also rose, to minus 0.26 from minus 0.34.
The indicators suggest that the U.S. economy expanded in the three months through January as they are above the minus 0.35 and minus 0.70 values that, respectively, have historically been associated with periods of economic growth.
Write to Xavier Fontdegloria at [email protected]
(END) Dow Jones Newswires
February 23, 2023 08:44 ET (13:44 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
