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Economy in Brief

U.S. Chicago Fed National Activity Index Remains Negative
by Tom Moeller  July 22, 2013

The Chicago Federal Reserve indicated that its National Activity Index (CFNAI) again was negative last month. The rate of decline moderated, however,  to -0.13 from its worst of -0.98 in August of last year. The three-month moving average of deterioration moderated slightly to -0.26, better than the low of -0.50 last August. During the last ten years, there has been a 79% correlation between the Chicago Fed Index and the q/q change in real GDP.

Monthly changes in the index components have been mixed. The Production & Income component showed the greatest m/m improvement with a m/m recovery to a minimal 0.04. That's up from last year's low of -0.49. The Employment, Unemployment & Hours series gained minimally to 0.06. The Personal Consumption & Housing reading deteriorated -0.19 and reversed four months of improvement. Sales, Inventories & Inventories slipped to -0.04 and has been in a sideways trend since early 2011. The Chicago Fed reported that during June, 41 of the 85 individual indicators made positive contributions to the overall index while 44 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 Jun May Apr Jun'12 2012 2011 2010
CFNAI -0.13 -0.29 -0.37 -0.47 -0.08 -0.08 0.02
 3-Month Moving Average -0.26 -0.37 -0.07 -0.20 -- -- --
  Personal Consumption & Housing -0.19 -0.15 -0.18 -0.27 -0.22 -0.30 -0.30
  Employment, Unemployment & Hours 0.06 0.00 -0.02 0.01 0.10 0.14 0.03
  Production & Income 0.04 -0.12 -0.26 -0.04 0.04 0.05 0.20
  Sales, Orders & Inventories -0.04 -0.02 0.10 -0.13 -0.01 0.04 0.09
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