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Economy in Brief

U.S. Chicago Fed National Activity Index Still Indicates Subpar Economic Growth
by Tom Moeller  August 20, 2013

The Chicago Federal Reserve indicated that its National Activity Index (CFNAI) remained negative last month. At -0.15, it was the sixth negative reading this year. The three-month moving average of deterioration moderated slightly to -0.15 from -2.0. These figures compare to a low of -0.51 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 remained mixed. The Sales, Orders & Inventories component rose to 0.04 from -0.07 during June. Also rising was the Personal Consumption & Housing series, which improved to -0.15 from -0.20. The Employment, Unemployment & Hours series was roughly stable at 0.06. Moving downward, the Production & Income series fell to -0.10 from -0.01. The Chicago Fed reported that during July, 38 of the 85 individual indicators made positive contributions to the overall index while 47 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. 

"An Update on the Tapering Debate" from St. Louis Fed President James Bullard can be found here.

Chicago Federal Reserve Bank Jul Jun May Jul'12 2012 2011 2010
CFNAI -0.15 -0.23 -0.07 -0.05 -0.07 -0.08 0.02
 3-Month Moving Average -0.15 -0.25 -0.30 -0.24 -- -- --
  Personal Consumption & Housing -0.15 -0.20 -0.16 -0.19 -0.22 -0.30 -0.30
  Employment, Unemployment & Hours 0.06 0.05 0.02 -0.04 0.10 0.14 0.03
  Production & Income -0.10 -0.01 -0.09 0.03 0.04 0.05 0.20
  Sales, Orders & Inventories 0.04 -0.07 0.16 0.15 -0.01 0.04 0.09
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