Chicago Fed's index shows US economy strengthening
An update released on Monday by the Federal Reserve Bank of Chicago showed last month's pickup in employment and production data, together with improvement in the category of sales, orders and inventories, took the headline measure of the domestic economy to 0.34 above the neutral level. The overall reading compares to 0.02 in negative territory registered for January, slightly higher than in the initial report.
A value of zero in the Chicago Fed National Activity Index (CFNAI) suggests the economy is growing at its historical trend, while a negative value indicates economic expansion is below average.
Employment contributed 0.21 or 0.15 points more than in the previous month. Production-related indicators accounted for 0.09, against 0.04 in the prior survey, as manufacturing rebounded. The central bank's subsidiary noted the sales item bounced from a negative 0.01 to 0.08 in the green, while that only the personal consumption and housing category had a negative impact, which grew from 0.03 from January to 0.11.
The December value of the CFNAI was mended substantially higher, from 0.18 to 0.41. The three-month average, a less volatile category, strengthened last month from 0.07 to 0.25, the strongest point since December 2014 and modestly higher than the national economic activity's historical trend. Analysts pointed to limited inflationary pressure expected for the year ahead.