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Economy in Brief

Chicago Fed National Activity Index Firms
by Tom Moeller  August 22, 2016

The National Activity Index from the Federal Reserve Bank of Chicago increased to 0.27 during July from 0.05 in June, revised from 0.16. It was the strongest reading in twelve months. The three-month moving average improved to -0.10, its best reading since February. During the last ten years, there has been a 75% correlation between the Chicago Fed Index and the q/q change in real GDP.

Improvement in the component series was widespread. The Production & Income reading rose sharply to 0.23, its highest point since last July. The Employment, Unemployment & Hours figure increased to 0.09, the strongest reading in six months. The Sales, Orders & Inventories figure was positive for the first time since September. Holding steady was the Personal Consumption & Housing reading. The Fed reported that 53 of the 85 component series made positive contributions to the total while 32 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.

Remarks on the U.S. Economy from Stanley Fischer, Vice Chairman of the Federal Reserve can be found here.

Chicago Federal Reserve Bank Jul Jun May Jul '15 2015 2014 2013
National Activity Index (percent) 0.27 0.05 -0.63 0.34 -0.17 0.16 -0.08
 3-Month Moving Average -0.10 -0.19 -0.43 -0.02 -- -- --
  Personal Consumption & Housing -0.06 -0.06 -0.10 -0.06 -0.09 -0.11 -0.15
  Employment, Unemployment & Hours 0.09 0.05 -0.13 0.20 0.07 0.18 0.09
  Production & Income 0.23 0.07 -0.22 0.26 -0.14 0.06 -0.04
  Sales, Orders & Inventories 0.01 -0.01 -0.17 -0.05 -0.02 0.04 0.02
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