Recent Updates

  • US: BEA Auto Sales (May), Mfrs' Shipments Inventories & Orders (Apr), ADP Employment Report (May)
  • US: US Sector PMI (May)
  • Composite PMIs: Australia, Singapore, Japan, China, Egypt, Saudi Arabia, UAE, India, Russia, Kazahkstan, Mozambique, Spain, South
  • more updates...

Economy in Brief

Chicago Fed National Activity Index Points to Below Trend Growth in Q4
by Gerald D. Cohen  January 22, 2020

• Activity index declines to -0.35 in December.

• Three-month average at -0.23 suggests below trend growth for Q4.

• Production and income indicators led the decline.

The Federal Reserve Bank of Chicago's National Activity Index decreased to -0.35 in December from a downwardly-revised 0.41 in November (was 0.56). The three-month moving average, which smooths out volatility in the monthly figures, improved to -0.23 from -0.31. The negative reading for the quarter suggests below-trend growth in the fourth quarter of 2019. During the last 20 years there has been a 70% correlation between the Chicago Fed Index and the quarter-on-quarter real GDP growth. However, during the last 10 years that correlation has dropped to just 25%.

Three out of four of the contributing sectors decreased in December led by the production and income indicators, which contributed -0.26 points to the decline. The diffusion index, which measures the breadth of movement in the monthly series, edged down to -0.27 as 56 out of the 85 components deteriorated.

The CFNAI is a weighted average of 85 monthly 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.

These figures are available in Haver's SURVEYS database.

Federal Reserve Bank of Chicago Dec Nov Oct Dec '18 2019 2018 2017
National Activity Index (+ = Growth Above Trend) -0.35 0.41 -0.74 -0.03 -0.25 0.18 0.16
   Production & Income -0.26 0.40 -0.47 0.09 -0.17 0.09 0.08
   Employment, Unemployment & Hours -0.06 0.04 -0.06 -0.01 -0.01 0.12 0.08
   Personal Consumption & Housing 0.03 -0.01 -0.04 -0.22 -0.03 -0.06 -0.05
   Sales, Orders & Inventories -0.05 -0.02 -0.17 0.11 -0.04 0.02 0.05
  3-Month Moving Average -0.23 -0.31 -0.36 0.07 -- -- --
Diffusion Index -0.27 -0.25 -0.26 0.13 -0.18 0.16 0.08
close
large image