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Economy in Brief

U.S. Chicago Fed National Activity Index Suggests Economic Weakness
by Tom Moeller  May 20, 2013

The Chicago Federal Reserve reported that its April National Activity Index (CFNAI) declined to -0.53 from an unrevised -0.23 in March. The three-month moving average was relatively stable at -0.04, its lowest 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 again showed the greatest m/m deterioration as it fell to roughly its lowest level since August. The other component series were fairly stable m/m, but the Employment, Unemployment & Hours series remained at nearly its lowest in nine months. The Sales, Orders & Inventories component also was roughly unchanged m/m but it remained in negative territory. The Personal Consumption & Housing reading remained negative but has stayed in the improved trend since the middle of 2011. The Chicago Fed reported that during April, 32 of the 85 individual indicators made positive contributions to the overall index 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. 

The Delayed Recovery of Investment in Nonresidential Structures from the Federal Reserve Bank of Cleveland can be found here.


Chicago Federal Reserve Bank Apr Mar Feb Apr'12 2012 2011 2010
CFNAI -0.53 -0.23 0.63 -0.02 -0.08 -0.08 0.02
 3-Month Moving Average -0.04 -0.05 0.08 -0.13 -- -- --
  Personal Consumption & Housing -0.17 -0.15 -0.14 -0.24 -0.22 -0.30 -0.30
  Employment, Unemployment & Hours 0.00 0.01 0.35 -0.08 0.10 0.14 0.03
  Production & Income -0.34 -0.04 0.39 0.29 0.04 0.05 0.20
  Sales, Orders & Inventories -0.01 -0.04 0.03 0.01 -0.01 0.04 0.09
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