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Economy in Brief

Chicago Fed National Activity Index Declines
by Tom Moeller  May 20, 2019

The Federal Reserve Bank of Chicago reported that its National Activity index fell to -0.45 during April, after rising to 0.05 in March. Remaining negative was the three-month moving average, declining to -0.32, its lowest point since May 2016. During the last ten years, there has been a 31% correlation between the Chicago Fed Index and the q/q change in real GDP.

The National Activity Index Diffusion Index, which measures the breadth of movement in the monthly series, deteriorated to -0.22. That was the lowest level since October 2016, down from the peak of 0.37 in December 2017.

Deterioration in the April index was led by the Production & Income series to -0.44, the lowest level since May of last year. The Personal Consumption & Housing reading was negative, though not by as much as in recent months. The Sales, Orders & Inventories figure eased m/m to a fairly neutral reading. The Employment, Unemployment & Hours series improved slightly m/m and has been rising since December.

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 Apr Mar Feb Apr '18 2018 2017 2016
National Activity Index (percent) -0.45 0.05 -0.57 0.42 0.19 0.15 -0.11
 3-Month Moving Average -0.32 -0.24 -0.26 0.47 -- -- --
Diffusion Index -0.22 -0.16 -0.16 0.33 0.19 0.08 -0.17
  Production & Income -0.44 -0.04 -0.30 0.33 0.09 0.08 -0.06
  Employment, Unemployment & Hours 0.04 0.03 -0.11 0.13 0.12 0.08 0.02
  Personal Consumption & Housing -0.05 0.00 -0.12 -0.05 -0.05 -0.05 -0.06
  Sales, Orders & Inventories 0.01 0.06 -0.05 0.01 0.03 0.05 -0.00
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