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Economy in Brief

U.S. Chicago Fed National Activity Index Suggests Moderate Economic Growth
by Tom Moeller  March 25, 2013

The Chicago Federal Reserve reported that its February National Activity Index (CFNAI) rose to 0.44 from a downwardly revised -0.49 in January. Smoothing out the m/m volatility, the three-month moving average deteriorated to 0.09, its weakest reading since October. During the last ten years, there has been a 79% correlation between the Chicago Fed Index and the q/q change in real GDP.

The Production & Income component showed the sharpest m/m improvement. It made up all of January's sharp decline and returned to the December level. The Employment, Unemployment and Hours series also recovered to its highest level since last March. The Sales, Orders & Inventories series improved with a return to positive territory after two months in the red. The Personal Consumption & Housing series rose moderately leaving in place its upward trend since the middle of 2011. The Chicago Fed reported that during February, 58 of the 85 individual indicators made positive contributions to the overall index while 27 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 Feb Jan Dec Feb'12 2012 2011 2010
CFNAI 0.44 -0.49 0.33 0.25 -0.09 -0.04 0.04
 3-Month Moving Average 0.09 0.28 0.26 0.46 -- -- --
  Personal Consumption & Housing -0.16 -0.19 -0.14 -0.23 -0.22 -0.30 -0.30
  Employment, Unemployment & Hours 0.20 0.01 0.14 0.21 0.10 0.14 0.03
  Production & Income 0.34 -0.28 0.35 0.25 0.04 0.09 0.22
  Sales, Orders & Inventories 0.05 -0.01 -0.03 0.02 -0.01 0.04 0.09
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