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Economy in Brief

Chicago Fed National Activity Index Still Negative, Inflationary Pressure Low
by Tom Moeller February 25, 2008

The Federal Reserve Bank of Chicago reported that its January National Activity Index (CFNAI) remained negative, at -0.58. The three month moving average of the index also remained negative at -0.60 which was near the lowest since 2003.

The Bank indicated that the negative value of the three month moving average suggests low inflationary pressure from economic activity.

A zero value of the CFNAI indicates that the economy is expanding at its historical trend rate of growth of roughly 3%. During the last twenty years there has been a 68% correlation between the level of the CFNAI and q/q growth in real GDP.

During January, each of the four broad categories of indicators — employment, production, consumption and housing — continued to make negative contributions to the CFNAI.

The CFNAI is a weighted average of 85 indicators of economic activity. The indicators reflect activity in the following categories: production & income, the labor market, personal consumption & housing, manufacturing & trade sales, and inventories & orders.

The complete CFNAI report is available here.

The Globalization of U.S. Business Investment from the Federal Reserve Bank of Dallas is available here.

Chicago Fed January December January '07 2007 2006 2005
CFNAI -0.58 -0.69 -1.00 -0.42 0.01 0.28
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