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Economy in Brief

Chicago Fed National Activity Index Recovers
by Tom Moeller  October 23, 2014

The Chicago Federal Reserve reported that its National Activity Index (CFNAI) for September rebounded to 0.47 from a little-revised -0.25 in August. The three-month moving average improved to 0.25. During the last ten years, there has been a 75% correlation between the Chicago Fed Index and the q/q change in real GDP.

Three of the four component series improved last month. The Production & Income reading reversed its August downdraft and returned to the highest level since February. The Employment, Unemployment & Hours figure also recovered to the highest level in three months. The Sales, Orders & Inventories index recovered slightly following its August downdraft. Working the other way, the Personal Consumption & Housing series declined to its lowest level in three months. The Chicago Fed reported that during September, 58 of the 85 individual indicators made positive contributions to the overall index while 27 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 Sep Aug Jul Sep'13 2013 2012 2011
CFNAI 0.47 -0.25 0.52 0.26 -0.01 -0.05 -0.07
 3-Month Moving Average 0.25 0.16 0.29 0.01 -- -- --
  Personal Consumption & Housing -0.13 -0.09 -0.12 -0.16 -0.15 -0.21 -0.29
  Employment, Unemployment & Hours 0.22 0.04 0.10 0.06 0.09 0.10 0.13
  Production & Income 0.30 -0.20 0.22 0.23 0.02 0.04 0.05
  Sales, Orders & Inventories 0.08 -0.01 0.31 0.13 0.03 -0.01 0.03
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