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Economy in Brief

Chicago Fed National Activity Index Deteriorates
by Tom Moeller  September 22, 2016

The National Activity Index from the Federal Reserve Bank of Chicago declined to -0.55 during August from 0.24 in July, revised from 0.27. It was the weakest reading in three months. The three-month moving average was little changed at -0.07. During the last ten years, there has been a 75% correlation between the Chicago Fed Index and the q/q change in real GDP.

Weaker readings in the component series were widespread. The Production & Income reading fell sharply to -0.33, its lowest level since March. The Employment, Unemployment & Hours figure declined to -0.09, the weakest level in three months. The Sales, Orders & Inventories figure eased to -0.05, in negative territory where it's been for most of the past year. The Personal Consumption & Housing reading fell to -0.08, also the weakest figure in three months. The Fed reported that 19 of the component series made positive contributions to the total while 66 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 Aug Jul Jun Aug '15 2015 2014 2013
National Activity Index (percent) -0.55 0.24 0.09 -0.33 -0.17 0.16 -0.08
 3-Month Moving Average -0.07 -0.09 -0.16 -0.01 -- -- --
  Personal Consumption & Housing -0.08 -0.06 -0.04 -0.09 -0.08 -0.11 -0.15
  Employment, Unemployment & Hours -0.09 0.15 0.02 -0.10 0.07 0.18 0.09
  Production & Income -0.33 0.15 0.12 -0.06 -0.14 0.06 -0.04
  Sales, Orders & Inventories -0.05 0.00 -0.01 -0.08 -0.02 0.04 0.02
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