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Economy in Brief

Chicago Fed National Activity Index Deteriorates
by Tom Moeller  December 21, 2015

The Chicago Federal Reserve reported that its National Activity Index (CFNAI) during November fell to a three-month low of -0.30 from -0.17 in October, revised from -0.04. The 3-month moving average eased to -0.20, its weakest reading since March and indicated that economic growth was slightly below its long-term trend. During the last ten years, there has been a 77% correlation between the Chicago Fed Index and the q/q change in real GDP.

Movement in the four component series of the overall index was mixed last month. The Production & Income reading fell to -0.27, its lowest reading since January 2014. The Employment, Unemployment and Hours figure eased to 0.05 from 0.08. These two positive readings followed two negative postings. To the upside, the Sales, Orders & Inventories series improved minimally to -0.02 from -0.03, but still posted the third negative number in four. The Personal Consumption & Housing series increased to -0.06, but has been moving sideways since the spring. The Fed reported that 37 of the 85 component series made positive contributions to the total while 48 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 Nov Oct Sep Nov'14 2014 2013 201
National Activity Index (percent) -0.30 -0.17 -0.13 0.77 0.21 -0.05 -0.12
 3-Month Moving Average -0.20 -0.18 0.04 0.42 -- -- --
  Personal Consumption & Housing -0.06 -0.11 -0.07 -0.06 -0.11 -0.15 -0.21
  Employment, Unemployment & Hours 0.05 0.08 -0.04 0.28 0.18 0.10 0.09
  Production & Income -0.27 -0.11 -0.19 0.48 0.11 0.02 -0.00
  Sales, Orders & Inventories -0.02 -0.03 0.17 0.07 0.04 0.02 -0.00
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