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Economy in Brief

Chicago Fed Index Continues to Indicate Recession
by Tom Moeller May 20, 2008

The April National Activity Index (CFNAI), published by the Chicago Federal Reserve Bank, fell to -1.17 after a slight improvement in March. The decline lowered the three month moving average of the figure to -1.24 which was its lowest level since the end of the 2001 recession.

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. An index level at or below -0.70 typically has indicated negative U.S. economic growth.

The complete CFNAI report is available here and the historical data are available in Haver's Surveys database.

Each of the four broad categories of indicators — employment, production, consumption and housing — continued to make negative contributions to the CFNAI during April.

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.

Economic Trends and the Chicago Fed National Activity Index from the Federal Reserve Bank of Chicago is available here.

Chicago Fed April March April '07 2007 2006 2005
CFNAI -1.17 -0.98 -0.20 -0.42 -0.05 0.26
  3-Month Average -1.24 -1.05 -0.15 -0.34 -0.03 0.26
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