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Economy in Brief

Chicago Fed National Activity Index Suggests Slower Economic Growth
by Tom Moeller  May 22, 2014

The Chicago Federal Reserve reported that its National Activity Index (CFNAI) backpedaled to -0.32 last month from 0.34 during March, revised from 0.20. The latest reading was the weakest since January and remained down versus November's high of 0.66. Despite the decline, the three-month moving average improved to 0.19. During the last ten years, there has been an 80% correlation between the Chicago Fed Index and the q/q change in real GDP.

The Production & Income reading collapsed to -0.37 from 0.27, nearly its lowest level of the economic expansion. Also down was the Personal Consumption & Housing figure to -0.12 from -0.07. The Employment, Unemployment & Hours reading was fairly constant at 0.17 and the Sales, Orders & Inventories number was little-changed at 0.00. The Chicago Fed reported that during April, 34 of the 85 individual indicators made positive contributions to the overall index while 51 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 Apr Mar Feb Apr'13 2013 2012 2011
CFNAI -0.32 0.34 0.57 -0.34 -0.01 -0.05 -0.07
 3-Month Moving Average 0.19 0.04 -0.13 -0.04 -- -- --
  Personal Consumption & Housing -0.12 -0.07 -0.13 -0.16 -0.15 -0.21 -0.29
  Employment, Unemployment & Hours 0.17 0.15 0.07 -0.04 0.09 0.10 0.13
  Production & Income -0.37 0.27 0.57 -0.20 0.02 0.04 0.05
  Sales, Orders & Inventories 0.00 -0.01 0.06 0.07 0.03 -0.01 0.03
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