National Activity Index Shows Noticeable Improvement

The national activity index improved noticeably in September, to 0.17 from a revised minus 0.37 in August. The biggest difference comes from production indicators which reserved a minus 0.33 showing in August, one due in part to one-time effects from Hurricane Harvey, to a gain of 0.10. Employment contributed 0.06, up from August's 0.01, as a sharp drop in the unemployment rate to 4.2 percent offset a 33,000 decline in nonfarm payrolls. Sales, orders & inventories were once again a moderate plus and personal consumption & housing a moderate minus. Despite September's overall improvement, the 3-month average, pulled down by the sharp weakness in August, held at minus 0.16 which is the weakest reading for what has been a weak year for this indicator.

Recent History Of This Indicator:
Hurricanes scrambled September's economic data pointing to uncertain results for the national activity index. Employment was sharply mixed with payrolls posting a rare decline while at the same time the unemployment rate and wage data showed strength. Retail sales soared on replacement demand for vehicles while the manufacturing component of the industrial production report posted no better than a marginal increase. Forecasters see national activity coming in at minus 0.10 in September vs minus 0.31 in August though the range of estimates is wide, from minus 1.70 to plus 0.09.