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The monthly Index of Economic Activity[1] increased in September by 1.8 percent (Figure 1).  The regular index reflects the average monthly growth estimate from July to September, including the July recovery from the temporary reduction in economic activity during Israel’s military operation against Iran.  However, a broader look at average growth over a four-month period, which neutralizes the effect of the volatility resulting from the military operation against Iran, shows that the Index grew by only 0.2 percent in September, which is below the long-term trend (about 0.3 percent).  The regular Index was positively influenced by increases in credit card purchase data and in data on goods imports and exports in July and September, trade revenue and industrial production data for July, and labor market data for July–September. In contrast, the purchasing managers index in the US for July and August and gasoline consumption data had a negative effect on the Index (Tables 1 and 2).

The Index for recent months was revised upward in view of the excessive volatility of its reference period and the completion of data that were previously missing.

Figure 1 presents the Index data over the past two years.  Table 1 presents the contributions of the Index’s components to the overall estimate, and Table 2 presents the monthly rate of change in the Index’s components.

 

FIGURE 1: The Monthly Index of Economic Activity

* The table presents the contribution of each group of components in the monthly index, such that the monthly estimate constitutes the sum of the contributions of each of the components detailed in the table.  Some of the raw data influence the monthly estimate with a lag or influence the estimates of several months.

 

 Table 2 | Changes in the Index Components in Recent Months

(monthly rates of change, percent, seasonally adjusted)

 

[1] The monthly Index of Economic Activity reflects the three-month average of the estimated monthly growth of GDP.  The estimate is based on a model developed at the Bank of Israel (Ginker and Suhoy, 2021).