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Economy in Brief

Chicago Fed Index Is Negative Due To Consumption & Housing
by Tom Moeller  March 21, 2011

The Chicago Fed reported that its National Activity Index (CFNAI) remained negative last month at -0.04 versus an upwardly revised -0.01 in January, initially reported at -0.16. The index was down sharply since its March '10 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 0.11. The personal consumption & housing component was negative in February.

The CFNAI is a weighted average of 85 indicators of economic activity. 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.

A separate index covering just Midwest manufacturing activity rose its highest level since November 2008 due to broad-based improvement amongst sectors. The Chicago Federal Reserve figures are available in Haver's SURVEYS database.

Output Gaps: Uses and Limitations from the Federal Reserve Bank of Philadelphia can be found here

Chicago Federal Reserve Bank Feb Jan Dec Feb'10 2010 2009 2008
CFNAI -0.04 -0.01 0.38 -0.54 -0.10 -1.55 -1.85
 3-Month Moving Average 0.11 0.05 -0.08 -0.32 -- -- --
  Personal Consumption & Housing -0.45 -0.39 -0.42 -0.32 -0.36 -0.41 -0.27
  Employment, Unemployment & Hours 0.30 0.06 0.22 -0.12 0.03 -0.82 -0.67
  Production & Income 0.03 0.29 0.56 -0.17 0.19 -0.21 -0.61
  Sales, Orders & Inventories 0.08 0.06 0.03 0.10 0.05 -0.11 -0.29
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