CFNAI monthly index down, 3 month average up

The Chicago Fed National Activity Index (CFNAI) is one of the reports I favor with significant weight. It is a very broad measure of economic activity.

The October report was released today.

From the report:

"Thirty-two of the 85 individual indicators made positive contributions to the index in September, while 53 made negative contributions. Thirty-nine indicators improved from August to September, while 46 indicators deteriorated."

This looks like a very weak report to me. The monthly index has been down the last two out of three months. The second derivative is negative. The 3-month moving average (MA3) only broke -0.7 because of the very strong reading in July, probably influenced by cash 4 clunkers.

Without an improved number in October, the MA3 is likely to move back below -0.7 again next month.