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Economy in Brief
U.S. Housing Affordability Improves During November
The NAR reported that its Fixed Rate Mortgage Housing Affordability Index rose 0.7% (-0.7% y/y)...
U.S. Retail Sales Continue to Fall During December as COVID-19 Cases Increase
Total retail sales declined 0.7% (+2.9% y/y) during December...
Empire State Manufacturing Index Declines in January
The Empire State Manufacturing Index of General Business Conditions decreased to 3.5 in January...
U.S. Industrial Production Continues Recovery
Industrial production advanced 1.6% in December...
U.S. PPI Rose 0.3% in December
The Producer Price Index for final demand rose 0.3% (0.8% y/y) in December...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller April 20, 2020
• The Federal Reserve Bank of Chicago indicated that the economy entered a downturn in the wake of the COVID-19 outbreak.
The National Activity Index (CFNAI) declined to -4.19 during March from 0.06 in February, revised from 0.16. The three-month moving average of the index fell m/m to -1.47, its weakest level since June 2009. During the last 20 years, there has been a 71% correlation between the Chicago index and the q/q change in real GDP.
Each of the four component series of the index turned negative last month. The Production & Income series fell to a record low of -2.72. The Employment, Unemployment & Hours series declined to -1.23, the weakest reading since April 2009. The Personal Consumption & Housing gauge fell to -0.19, the lowest level since December 2018. The Sales, Orders and Inventories of -0.05 compared to -0.06 in February.
The diffusion index of the CFNAI, which measures the breadth of component change, fell sharply to -0.32, its lowest reading since May 2016.
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.
Do Stay-at-Home Orders Cause People to Stay at Home? Effects of Stay-at-Home Orders on Consumer Behavior from the Federal Reserve Bank of Chicago is available here.
Federal Reserve Bank of Chicago | Mar | Feb | Jan | Mar '19 | 2019 | 2018 | 2017 |
---|---|---|---|---|---|---|---|
National Activity Index (+ = Growth Above Trend) | -4.19 | 0.06 | -0.27 | -0.04 | -0.23 | 0.15 | 0.17 |
Production & Income | -2.72 | 0.06 | -0.30 | -0.03 | -0.16 | 0.10 | 0.09 |
Employment, Unemployment & Hours | -1.23 | 0.07 | 0.04 | 0.02 | -0.01 | 0.10 | 0.07 |
Personal Consumption & Housing | -0.19 | -0.02 | 0.03 | 0.02 | -0.03 | -0.06 | -0.05 |
Sales, Orders & Inventories | -0.05 | -0.06 | 0.04 | -0.05 | -0.04 | 0.02 | 0.06 |
3-Month Moving Average | -1.47 | -0.20 | -0.06 | -0.24 | -- | -- | -- |
Diffusion Index | -0.32 | -0.21 | -0.07 | -0.20 | -0.15 | 0.16 | 0.09 |