April 2019 Chicago Fed National Activity Index

April 2019 Chicago Fed National Activity Index

Output slowed in April according to the Chicago Fed National Activity Index (CFNAI).  This 85-component indicator fell to -0.45 after a reading of 0.05 in March.  Somewhat concerning is the three-month moving average which remained negative at -0.32, its lowest level since May 2016.  While this is not yet at levels which tend to correlate with recessions, it has been below zero for three consecutive months.

Three of the four major categories worsened in the period.  Production related indicators declined to -0.44 from -0.04 in March.  Personal consumption and housing dipped below zero to -0.05 after a neutral reading.  Sales, orders, and inventories managed to stay positive but fell to 0.01 from 0.06 at the end of the first quarter.  Finally, employment related indicators were the only area with a net gain, rising marginally to 0.04 from 0.03. 

A majority of individual components were negative in April.  Thirty-three of the 85 indicators made positive contributions, while 52 subtracted from the total.  Just 37 improved in the period. Of those improving, 14 made negative contributions.

From the looks of this comprehensive indicator, America’s economy preformed worse than its recent trend to start the current quarter.  Evidence that indicates the pace of output is decelerating as this year wears on continued mounting.  This is not necessarily the end of the current expansion, but it suggests to Atlas that the nation’s economy is more susceptible to exogenous shocks once again.  Unfortunately, there are countless outstanding issues which could take advantage of this vulnerability.