Chicago Fed Index Up in September

The Chicago Fed reported on Thursday that its National Activity Index increased to 0.00 in September from -1.17 during August.

The Chicago Fed reported on Thursday that its National Activity Index increased to 0.00 in September from -1.17 during August. An exact zero reading is fairly rare, but it does have a precise definition: the national economy is expanding at its historical trend rate of growth.

All of the four broad categories of the 85 indicators that make up the index—production and income; employment, unemployment and hours; personal consumption and housing; and sales, orders and inventories—showed improvement in September. Moreover, each category except consumption and housing made a positive contribution to the index during the month.

The index’s three-month moving average, called the CFNAI-MA3, increased from -0.53 in August to –0.37 in September, which is an improvement, but also the seventh consecutive reading below zero. That suggests that growth in national economic activity was below its historical trend. But the CFNAI-MA3 also suggests, as something of a silver lining, subdued inflationary pressure on the U.S. economy in the coming year.

Pending home sales up

According to the National Association of Realtors on Thursday, its Pending Home Sales Index rose from 99.2 in August to 99.5 in September, for a slight gain in the forward-looking indicator. In September 2011, the index stood at 86.9. For the purposes of the index, a pending sale is one inked but not closed.

The NAR also predicted that when all is said and done for 2012, some 4.6 million existing U.S. homes will have been sold, an increase of 9 percent over the absolutely crummy 2011. The organization further predicts that there will be another 9 percent increase in existing home sales in 2013, compared with this year, partly because inventories are relatively low.

Separately, the National Association of Homebuilders said on Thursday that its Remodeling Index rose from 45 in the second quarter to 50 in the third. The index, which tracks remodeling jobs of all sizes, is now at its highest level since before the recession (3Q05). Hard times cut deeply into the business as homeowners put jobs off to wait for better times, or had more important things to worry about, such as not losing their home all together.

Initial claims swing down

The U.S. Department of Labor reported on Thursday that initial unemployment claims, which tend to be volatile, dropped 23,000 for the week ending October 20 to 369,000. That followed a sharp rise for the week of October 13 and a sharp drop the week before. The less volatile four-week moving average increased 1,500 to 368,000.

Wall Street was up most of the day on Thursday, but trended downward toward the end, perhaps miffed by Apple not making its numbers for its fiscal fourth quarter. Still, the indices ended positive. The Dow Jones Industrial Average gained 26.34 points, or 0.2 percent, while the S&P 500 was up 0.3 percent, and the Nasdaq advanced 0.15 percent.