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Economy in Brief

Chicago Fed National Activity Index Steadies
by Tom Moeller  July 22, 2019

The Federal Reserve Bank of Chicago reported that its National Activity index was little changed at -0.02 during June. That came after rising to -0.03 in May from April's -0.73. The three-month moving average also was steady last month versus May at -0.26, after April's weakening to -0.47. During the last twenty years, there has been a 70% correlation between the Chicago Fed Index and the q/q change in real GDP.

The National Activity Diffusion Index, which measures the breadth of movement in the monthly series, also was steady at -0.11. That was down from the peak of 0.47 in April 2018.

Stability in the June index reflected mixed performance amongst the component series. The Employment, Unemployment & Hours series rose to 0.06 from -0.08. It was the highest level since January. The Personal Consumption & Housing reading was steady m/m at -0.05, up from the December 2018 low of -0.19. The Sales, Orders & Inventories figure eased m/m to -0.03, but remained up sharply from its low just two months earlier. The Production & Income component fell moderately to 0.00, still greatly improved versus the April low of -0.49.

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 Jun May Apr Jun '18 2018 2017 2016
National Activity Index (percent) -0.02 -0.03 -0.73 0.44 0.19 0.15 -0.11
 3-Month Moving Average -0.26 -0.27 -0.47 0.15 -- -- --
Diffusion Index -0.11 -0.11 -0.29 0.23 0.19 0.08 -0.17
  Production & Income 0.00 0.08 -0.49 0.37 0.09 0.08 -0.06
  Employment, Unemployment & Hours 0.06 -0.08 0.04 0.06 0.12 0.08 0.02
  Personal Consumption & Housing -0.05 -0.05 -0.05 -0.06 -0.05 -0.05 -0.06
  Sales, Orders & Inventories -0.03 0.02 -0.24 0.06 0.03 0.05 -0.00
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