Chicago Fed National Activity Index Sharply Lower

Declines in production components led the national activity index sharply lower in October. Falling to minus 0.71, well below expectations and the lowest reading since May, the monthly decline pulled the three-month moving average down to minus 0.31.

Production-related components contributed minus 0.55 to the overall index versus minus 0.36 in September, with total industrial production falling 0.8 percent in October after decreasing 0.3 percent previously. The contribution of the sales, orders, and inventories category ticked up to a minimal minus 0.03 in October. Employment-related indicators fell 0.10 October, down from a rise of 0.01 in September, reflecting a smaller rise in total non-farm payrolls by 128,000 in October after September's 180,000 increase and an uptick in the unemployment rate to 3.6 percent. Personal consumption and housing edged up to minus 0.03 in October from minus 0.05 previously, as housing starts increased to 1,314,000 annualized units in October from 1,266,000 in September.