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Economy in Brief

Chicago Fed Index Improved Marginally During February
by Tom Moeller March 23, 2009

The National Activity Index (CFNAI) for February from the Chicago Federal Reserve Bank rose slightly month-to-month but remained depressed. At -2.83 the figure contrasted with January's near-record low of 3.48. Since 1970 there has been a 75% correlation between the level of the index and the q/q change in real GDP.

The three-month moving average of the index of -3.48 was near its lowest since January of 1975.

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%.

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

Three of the four sub-categories of the index including employment, production, and consumption & housing improved slightly from January but remained at a depressed level. Seventy three of the individual indicators in the overall series made negative contributions while twelve made a positive contribution.

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 fell during January to its lowest level since 1994. Indicators for the steel, machinery and auto sectors each fell but the measure for the resource sector was stable.

The Chicago Federal Reserve figures are available in Haver's SURVEYS database.

Preliminary Analysis of the President's Budget and an Update of CBO's Budget and Economic Outlook from the Congressional Budget Office can be found here.

Chicago Fed February January February '08 2008 2007 2006
CFNAI -2.83 -3.74 -1.31 -1.78 -0.36 0.02
  3-Month Average -3.48 -3.61 -0.89 -- -- --
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