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Economy in Brief

U.S. Chicago Fed Index Recovers
by Tom Moeller October 25, 2012

The Chicago Federal Reserve reported that its National Activity Index (CFNAI) rebounded to 0.00 during September from -1.17 during August, revised from -0.87. The three-month moving average improved to -0.37 but still was nearly the lowest level since late 2009. During the last ten years, there has been an 81% correlation between the Chicago Fed Index and the q/q change in real GDP.

Monthly improvement in the components was broad-based but most notable in the Production & Income component. It rose to 0.03 in September from -0.72. The Employment, Unemployment & Hours component also rebounded to 0.12 after three months in negative territory. The Sales, Inventories & Orders component returned to positive and the Personal Consumption & Housing series was up but remained in negative territory. The Chicago Fed reported that in September, an improved 39 of the 85 individual indicators made positive contributions to the index while 46 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 Sep Aug Jul Sep '11 2011 2010 2009
CFNAI 0.00 -1.17 0.07 -0.17 0.03 -0.01 -1.63
 3-Month Moving Average -0.37 -0.53 -0.21 -0.08 -- -- --
  Personal Consumption & Housing -0.19 -0.24 -0.21 -0.25 -0.31 -0.30 -0.35
  Employment, Unemployment & Hours 0.12 -0.06 -0.02 0.21 0.12 0.03 -0.82
  Production & Income 0.03 -0.72 0.11 0.05 0.09 0.22 -0.29
  Sales, Orders & Inventories 0.04 -0.14 0.20 -0.18 0.04 0.09 -0.16
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