Economy Improved Slightly in March

The Chicago Fed National Activity Index (CFNAI) increased to −0.63 in March from a downward revised value of −0.91 in February. The revision to February’s index was relatively small, from −0.89 as reported last month. The manufacturing sector continues to be a primary source of weakness in the CFNAI. In addition, negative employment growth outside of manufacturing adversely affected the March reading. The overall tenor of the March manufacturing data, however, was improved relative to February, raising the index somewhat. The three-month moving average index, CFNAI-MA3, was −0.80 in March, an improvement over the downward revised −0.85 value in February. March was the ninth consecutive month that the CFNAI-MA3 was below zero, an indication of below-trend growth in the national economy and a sign of easing pressures on future inflation.