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Economy in Brief

U.S. Chicago Fed National Activity Index Weakens
by Tom Moeller  February 24, 2014

The Chicago Federal Reserve reported that its National Activity Index (CFNAI) fell sharply last month to -0.39 from -0.03 in December, revised from 0.16. The latest level was down from November's high of 0.73. As a result, the three-month moving average fell to 0.10, the lowest level since September. During the last ten years, there has been a 80% correlation between the Chicago Fed Index and the q/q change in real GDP.

Monthly changes in the index components were mixed in January. Most of the downward pressure resulted from a sharply lower Production & Income reading of -0.36 versus 0.06. The Personal Consumption & Housing index fell to -0.18 versus -0.14. Offsetting these declines, the Employment, Unemployment & Hours index improved to 0.13 from 0.06 while the Sales, Orders & Inventories series ticked higher to 0.02 versus -0.01. The Chicago Fed reported that during January, 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 Jan Dec Nov Jan'13 2013 2012 2011
CFNAI -0.39 -0.03 0.73 -0.49 -0.00 -0.07 -0.07
 3-Month Moving Average 0.10 0.26 0.36 0.12 -- -- --
  Personal Consumption & Housing -0.18 -0.14 -0.06 -0.18 -0.15 -0.21 -0.29
  Employment, Unemployment & Hours 0.13 0.06 0.38 0.09 0.09 0.10 0.13
  Production & Income -0.36 0.06 0.19 -0.30 0.02 0.04 0.05
  Sales, Orders & Inventories 0.02 -0.01 0.22 -0.10 0.03 -0.01 0.03
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