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Economy in Brief

Chicago Fed National Activity Index Reaches Expansion High
by Tom Moeller  December 22, 2014

The Chicago Federal Reserve reported that its National Activity Index (CFNAI) for November improved to 0.73 from 0.31 during October, revised from 0.14. It was the highest level since December, 2006. The three-month moving average rose to 0.48, its highest point since May, 2010. During the last ten years, there has been a 75% correlation between the Chicago Fed Index and the q/q change in real GDP.

The driver for the increase was the Production & Income component rising to 0.64, its highest level since May, 2010. The Personal Consumption & Housing series held fairly steady at -0.10. The remaining components eased. The Sales, Orders & Inventories series backpedaled to 0.02. The Employment, Unemployment & Hours figure worked lower to 0.17.

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.

Declining Labor Force Participation and Its Implications for Unemployment and Employment Growth from the Federal Reserve Bank of Chicago can be found here.

Chicago Federal Reserve Bank Nov Oct Sep Nov'13 2013 2012 2011
CFNAI 0.73 0.31 0.38 0.70 -0.01 -0.05 -0.07
 3-Month Moving Average 0.48 0.09 0.17 0.35 -- -- --
  Personal Consumption & Housing -0.10 -0.11 -0.15 -0.07 -0.15 -0.20 -0.29
  Employment, Unemployment & Hours 0.17 0.22 0.22 0.38 0.09 0.09 0.13
  Production & Income 0.64 0.09 0.26 0.15 0.03 0.06 0.04
  Sales, Orders & Inventories 0.02 0.11 0.05 0.24 0.03 -0.00 0.03
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