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Economy in Brief

Chicago Fed Index Returns To Negative Territory
by Tom Moeller  February 24, 2011

The Chicago Fed reported that its National Activity Index (CFNAI) fell last month to -0.16 from an upwardly revised 0.18 in December, initially reported at 0.03. The index remained down sharply since its March peak, though it has recovered lately from its low. The three-month moving average of the index, which smoothes out some of the series' volatility, improved modestly to -0.10.

An index level at or below -0.70 typically has indicated negative U.S. economic growth. A zero value of the CFNAI suggests that the economy is expanding at its historical trend rate of growth. During the last ten years it's had an 77% correlation with the quarterly growth in real GDP.

The CFNAI is a weighted average of 85 indicators of economic activity. The Chicago Fed indicated that January's deterioration was due mostly to the production & income numbers. Other series were roughly stable month-to-month. Thirty-nine of the 85 individual indicators made positive contributions to the index in January, while 46 had a negative effect. The Fed also indicated that 39 indicators improved from December to January, while 45 indicators deteriorated. One was unchanged.

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

Chicago Federal Reserve Bank Jan Dec Nov Jan'10 2010 2009 2008
CFNAI -0.16 0.18 -0.33 0.05 -0.12 -1.56 -1.85
 3-Month Moving Average -0.10 -0.14 -0.31 -0.14 -- -- --
  Personal Consumption & Housing -0.38 -0.43 -0.40 -0.40 -0.38 -0.42 -0.28
  Employment, Unemployment & Hours 0.11 0.15 -0.05 -0.08 0.03 -0.81 -0.67
  Production & Income 0.05 0.45 0.07 0.45 0.19 -0.21 -0.61
  Sales, Orders & Inventories 0.06 0.02 0.04 -0.05 0.04 -0.11 -0.29
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