The numbers: A measure of the U.S. economy from the Chicago Federal Reserve ticked higher in April from March as a stronger performance at factories and a healthy job market offset housing’s weaker contribution.
The Chicago Fed’s index of national economic activity was a positive 0.34 last month, gaining from the upwardly revised positive 0.32 in March, though weaker than a downwardly revised positive 0.73 in February. With the revision, February’s result lost its ranking as the highest reading since October 1999; now, it’s the strongest just since last October, when the index registered a positive 0.86, according to the St. Louis Fed’s FRED database.
The details: The index’s less-volatile, three-month moving average registered a positive 0.23 last month, up from a downwardly revised positive 0.11 in March.
The Chicago Fed index is a weighted average of 85 economic indicators, designed so that zero represents trend growth and a three-month average below negative 0.70 suggests a recession has begun. Fifty of the 85 individual indicators made positive contributions to the index in April, while 35 made negative contributions.
Production-related indicators, meaning factories, contributed positive 0.27 to the index in April, up from positive 0.19 in March.
Employment-related indicators contributed a positive 0.10 in April, up from positive 0.04 in March. As Labor Department data reported earlier this month, the unemployment rate fell to a 17-year low below 4%, while the U.S. added 164,000 new jobs in April and hourly wage growth barely crept higher.
Meanwhile, the contribution of the personal consumption and housing category was a negative 0.05 in April from positive 0.02 in March. Construction on new houses dropped 3.7% in April, previous government data showed. Housing starts had hit an 11-year high just a month earlier.
Market reaction: U.S. stocks SPX, +0.79% showed little reaction to Monday’s economic data, with leading indexes opening higher on optimism from China-U.S. trade developments.