The U.S. economy grew in September at a slower pace than in the previous few months, according to data from the Federal Reserve Bank of Chicago released Monday.

The Chicago Fed National Activity Index fell to minus 0.13 in September from 0.05 in August, below the 0.35 consensus forecast from economists polled by FactSet.

The CFNAI index is composed of 85 economic indicators drawn from four broad categories of data: production and income; employment, unemployment and hours; personal consumption and housing; and sales, orders and inventories. A positive index reading corresponds to growth above historical trend and a negative index reading corresponds to growth below trend.

The reading signals that the U.S. economy grew at a below-average rate in September. The last time the indicator suggested a subdued growth rate was in April.

The fall in the CFNAI was driven by production-related indicators, which contributed minus 0.37 points to the index as industrial production fell 1.3% in September after decreasing 0.1% in August.

The remaining three broad categories contributed positively to the index, but didn’t offset the decline driven by production.

Employment-related indicators contributed by 0.16 points in September, up from 0.09 points in August. The unemployment rate decreased 0.4 percentage points in September after edging down 0.2 percentage points in August, but nonfarm payrolls increased by 194,000 after rising by 366,000 the previous month.

The contribution of the sales, orders and inventories category to the CFNAI moved up to 0.07 in September from 0.01 in August.

Finally, the contribution of the personal consumption and housing category to the CFNAI was unchanged at 0.02 in September.

The CFNAI diffusion index rose to 0.22 in September from 0.20 in August, while the index’s three-month moving average, the CFNAI-MA3, decreased to 0.25 from 0.38. Both the diffusion index and the CFNAI-MA3 suggest that the U.S. economy is expanding at a moderate pace.
Source: Dow Jones