Chicago Fed National Activity Index Standing Stronger

The national activity index, at 0.17 in September, came in very near Econoday's consensus for 0.18 but looks soft against an upwardly revised August which now stands at a strong 0.27 vs an initial 0.18.

But two of the four components did improve vs August: employment contributed 0.07 vs August's 0.06 as a drop in the unemployment rate to 3.7 percent helped offset sharp slowing in payroll growth to 134,000 vs 270,000 in August; while contraction in consumer & housing component pulled the index down by 0.05 which is a key overall negative but still no worse than the 0.06 drag in August.

Showing marginally less growth than August was the production component, at 0.3 vs 0.4 in August, with sales, orders & inventories contributing 0.05 vs 0.10 in the prior month.

September's results make for a solid 3-month average of 0.21 and comparisons of readings over the third-quarter vs the second-quarter show roughly similar rates of growth. Though the negative pull from consumer & housing is a concern, today's results do hint at what is expected strength for Friday's GDP report.