Chicago Fed Activity Index Rises Solidly

The national activity index rose a solid 0.18 points in August to match July's upwardly revised reading. Of the index's four main components, production gave the most lift, contributing 0.16 points and led by a nearly 5 point rise in the Institute For Supply Management's (ISM) production index to 63.3 that offset slowing in the Federal Reserve's manufacturing index. And it was the ISM's new orders index, which at 65.1 also rose nearly 5 points, that led a 0.07 contribution for the sales, orders & inventories component. Employment was not a positive in the month, pulling the index down 0.01 as an employment drop of 423,000 in the household survey offset a sharp rise in payroll growth in establishment data. Personal consumption & housing, the fourth component, also weighed on the index, subtracting 0.04 as weakness in spending offset slight improvement in housing. Despite the spots of weakness in today's report, the 3-month average is showing acceleration, at 0.24 in August vs 0.02 in July.