Chicago Fed National Activity Index Shows Improvement

October was a soft month for the economy but solidly improved from September, based on the national activity index which is at minus 0.04 vs September's revised minus 0.29. October's improvement is centered in the key component of employment, at plus 0.11 vs September's minus 0.06. The gain reflects the month's very strong 271,000 rise in nonfarm payrolls and the 1 tenth downtick in the unemployment rate to 5.0 percent.

Turning to the three other components, manufacturing was also a plus for October, from minus 0.17 in September to minus 0.05 and reflecting the related component gain in the industrial production report. The sales/orders/inventories component was little changed, at minus 0.01, as was personal consumption & housing at minus 0.09.

The improvement in October, however, did not lift the 3-month average, at minus 0.20 vs a revised minus 0.03 in September in a reminder that the nation's economic growth remains, by historical standards, sub-par.