America’s economic activity picked up pace at the start of the year, according to a monthly index released Monday.
The Chicago Fed National Activity Index jumped to 0.18 in January from minus 0.21 in December. Readings above zero suggest the economy is growing faster than its historical average. The three-month moving average index, which smooths out month-to-month volatility, rose to minus 0.06 from minus 0.29. Both the December and January readings are consistent with periods of economic growth.
The diffusion index, a three-month average that measures how wide spread the change is across 85 economic indicators, improved in January, rising to minus 0.06 from minus 0.36. Fifty-seven indicators improved from December to January, while 28 indicators deteriorated. Of the indicators that improved, 20 still were drags on the index and the other 37 boosted it. A diffusion index better than minus 0.35 is considered consistent with a growing economy.
Rising activity in production and stronger employment related indicators pushed up the index. By contrast, consumer spending and housing were neutral contributors and the sales, orders, and inventory gaurges were drags, albeit less so than in the previous month.
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