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Economy in Brief

Chicago Fed National Activity Index Deterioration Intensifies
by Tom Moeller  April 20, 2015

The Chicago Federal Reserve reported that its National Activity Index (CFNAI) during March fell to -0.42 from -0.18, revised from -0.11. It was the weakest reading since January of last year. The three-month moving average remained negative. The reading of -0.27 was the lowest indication since October 2012. During the last ten years, there has been a 76% correlation between the Chicago Fed Index and the q/q change in real GDP.

Three of the four component series were negative last month. The Production & Income series fell to -0.27, roughly equaling its lowest level since January of last year. The Employment, Unemployment and Hours figure turned negative for the first time since April 2013. The Personal Consumption & Housing series remained negative at -0.13, though that was improved following last February's collapse to -0.22. At 0.01, the Sales, Orders and Inventories series remained weak. The three-month moving average of the CFNAI deteriorated sharply to -0.27, the weakest indication since October 2012. The Fed reported that 38 of the 85 component series made positive contributions to the total 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.

Chicago Federal Reserve Bank Mar Feb Jan Mar '14 2014 2013 2012
CFNAI -0.42 -0.18 -0.22 0.59 0.21 0.01 -0.05
 3-Month Moving Average -0.27 -0.12 0.22 0.12 -- -- --
  Personal Consumption & Housing -0.13 -0.22 -0.08 -0.05 -0.11 -0.14 -0.20
  Employment, Unemployment & Hours -0.03 0.11 0.11 0.21 0.18 0.10 0.09
  Production & Income -0.27 -0.08 -0.28 0.29 0.10 0.03 0.06
  Sales, Orders & Inventories 0.01 0.01 0.03 0.14 0.04 0.03 -0.00
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