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Economy in Brief

Chicago Fed Index Remains Stable in May At Highest Level Since October
by Tom Moeller June 29, 2009

The National Activity Index published by the Chicago Federal Reserve Bank remained roughly unchanged during May versus April. Nevertheless, the index level of -2.30 was near its the highest level since October of last year. The latest figure was up from the series' low of -3.99 reached this past January. 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 rose slightly versus April and stood at its highest level since November.

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 figures are available in Haver's SURVEYS database.

The Bank reported that fifteen of the 85 individual indicators made positive contributions to the index in May while 70 made a negative contribution. The employment-related components made the largest positive contributions to the May 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.

In a separate survey, the Chicago Fed indicated that its Midwest manufacturing index fell during April to its lowest level since 1994. Indicators for the steel, machinery and the auto sectors fell to new lows but in the resource sector the figure rose slightly.

Fuel efficiency challenges the auto industry from the Federal Reserve Bank of Chicago can be found here.

Residential Housing and Personal Bankruptcy from the Federal Reserve Bank of Philadelphia is available here.

Chicago Fed May April May '08 2008 2007 2006
CFNAI -2.30 -2.27 -1.18 -1.77 -0.36 0.03
  3-Month Moving Average -2.67 -2.73 -1.12 -- -- --
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