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Economy in Brief

Chicago Fed Index Slightly Weaker in July
by Tom Moeller August 25, 2008

For July, the Chicago Federal Reserve Bank indicated that its National Activity Index (CFNAI) weakened slightly. The reading of -0.67 was lower than the revised figure of -0.59 in June.

The three-month moving average of the index, however, improved somewhat to -0.80 from -0.94 during the prior month. The figures were the least negative since January.

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

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

The components of the July index were mostly unchanged from June.

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.

In a separate survey, the Chicago Fed indicated that its Midwest manufacturing index improved in June to its best level since March. A rise in the auto sector sub-component was offset by deterioration the steel, machinery and resource sector indexes.

Reducing Systemic Risk is Friday's speech by Fed ChairmanBen S. Bernanke at the Federal Reserve Bank of Kansas City's Annual Economic Symposium, Jackson Hole, Wyoming and it can be found here.

Creating value-based competition in heath care from the Federal Reserve Bank of Chicago is available here.

Chicago Fed July June July '07 2007 2006 2005
CFNAI -0.67 -0.59 0.09 -0.43 -0.04 0.27
  3-Month Average -0.80 -0.94 -0.13  
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