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Economy in Brief

Chicago Fed Index Remained Negative In March
by Tom Moeller April 20, 2009

The March National Activity Index (CFNAI) from the Chicago Federal Reserve Bank remained negative last month. At -2.96 the figure was roughly stable with February but both figures were up marginally from the low reading of -4.03 reached in January. Since 1970 there has been a 74% correlation between the level of the index and the q/q change in real GDP.

The three-month moving average of the index ticked up slightly to -3.27 but remained 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.

The employment, production and income components made large negative contributions to the March index. Thirteen of the index's component sectors had a negative influence while 72 had a negative influence.

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 February to its lowest level since 1994. Indicators for the steel and machinery sectors each fell but the measure for the auto sector rose while the resource sector was unchanged.

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

Chicago Fed March February March '08 2008 2007 2006
CFNAI -2.96 -2.82 -1.14 -1.79 -0.37 0.03
  3-Month Average -3.27 -3.57 -3.69 -- -- --
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