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Economy in Brief

Chicago Fed National Activity Index Improves to Eight-Month High
by Tom Moeller  August 24, 2015

The Chicago Federal Reserve reported that its National Activity Index (CFNAI) during July jumped to 0.34 from -0.07 in June, revised from 0.08. The rise to the highest level since last November pulled the three-month moving average to break-even, its best level since January. During the last ten years, there has been a 77% correlation between the Chicago Fed Index and the q/q change in real GDP.

A rise in the Production & Income component was responsible for most of the gain in the overall index. It's increase to 0.28 from -0.14 brought it to the highest level since November. The Personal Consumption & Housing series rose to a firm -0.06 from -0.10 but the Employment, Unemployment & Hours figure remained unchanged at 0.11, still the highest point since February. The Sales, Orders & Inventories reading eased to 0.01 from 0.06. The Fed reported that 50 of the 85 component series made positive contributions to the total while 35 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 Jul Jun May Jul '14 2014 2013 2012
CFNAI 0.34 -0.07 -0.29 0.50 0.21 0.01 -0.05
 3-Month Moving Average 0.00 -0.08 -0.12 0.30 -- -- --
  Personal Consumption & Housing -0.06 -0.10 -0.07 -0.11 -0.11 -0.14 -0.20
  Employment, Unemployment & Hours 0.11 0.11 0.07 0.10 0.18 0.10 0.09
  Production & Income 0.28 -0.14 -0.12 0.23 0.11 0.03 0.06
  Sales, Orders & Inventories 0.01 0.06 -0.17 0.28 0.04 0.03 -0.00
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