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Economy in Brief

U.S. Chicago Fed Index Is Negative Again
by Tom Moeller  June 25, 2012

The May National Activity Index (CFNAI) from the Chicago Federal Reserve dropped to -0.45 from a revised 0.08 in April, reported as 0.11 last month. Moreover, the three-month moving deteriorated to -0.34, its lowest reading since June of last year. During the last ten years there has been an 81% correlation between the Chicago Fed Index and the q/q change in real GDP.

Month-to-month deterioration occurred primarily in the Production & Income series which reversed its April improvement. The other index components were roughly flat m/m or slightly improved m/m. The Chicago Fed reported that thirty two of the 85 individual indicators made positive contributions to the index in May while 53 made negative contributions.

The CFNAI is a weighted average of 85 indicators of national economic activity. It is constructed to have an average value of zero and a standard deviation of one. Since economic activity tends toward trend growth rate over time, a positive index reading corresponds to growth above trend and a negative index reading corresponds to growth below trend.

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

Chicago Federal Reserve Bank May Apr Mar May'11 2011 2010 2009
CFNAI -0.45 0.08 -0.64 -0.25 -0.06 0.00 -1.62
 3-Month Moving Average -0.34 -0.13 -0.05 -0.19 -- -- --
  Personal Consumption & Housing -0.25 -0.24 -0.26 -0.36 -0.32 -0.32 -0.36
  Employment, Unemployment & Hours 0.00 -0.13 0.13 0.02 0.12 0.04 -0.82
  Production & Income -0.20 0.42 -0.39 0.09 0.09 0.22 -0.27
  Sales, Orders & Inventories 0.00 0.02 -0.12 -0.17 0.04 0.07 -0.16
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