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Economy in Brief

Chicago Fed National Activity Index Weakens in April
by Tom Moeller  May 24, 2021

• Overall activity abates after recovery from weather-related setbacks.

• Three of four components, however, indicate positive growth.

The Federal Reserve Bank of Chicago's National Activity Index fell to 0.24 in April from an unrevised 1.71 in March. February's reading was little revised at -1.75.

The three-month moving average, which smoothes out the m/m volatility in the index, fell to 0.07 last month after rising to 0.35 in March. During the last 20 years, there has been a 75% correlation between the Chicago Fed Index and quarterly growth in real GDP.

A decline in the Production & Income component to 0.18 from 0.92 led the falloff in April. The Employment, Unemployment & Hours figure pulled back to 0.05 last month after rising to 0.38 in March. The Personal Consumption & Housing series fell to -0.06 last month after rising to 0.50. Offsetting these declines, the Sales, Orders & Inventories series improved to 0.07 from -0.09. The CFNAI diffusion index, which measures the breadth of movement in the component series, eased to 0.22 from 0.32, as 47 of the 85 component series contributed positively and 38 made negative contributions to the index overall.

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. The CFNAI was constructed using data available as of May 20, 2021. At that time, April data for 51 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index.

These figures are available in Haver's SURVEYS database.

Federal Reserve Bank of Chicago Apr Mar Feb Apr'20 2020 2019 2018
Chicago Fed National Activity Index (+ = Growth Above Trend) 0.24 1.71 -1.75 -17.66 -0.49 -0.15 0.11
   Production & Income 0.18 0.92 -1.23 -5.56 -0.13 -0.11 0.06
   Employment, Unemployment & Hours 0.05 0.38 0.16 -8.73 -0.31 0.00 0.08
   Personal Consumption & Housing -0.06 0.50 -0.22 -1.28 -0.04 -0.02 -0.04
   Sales, Orders & Inventories 0.07 -0.09 -0.46 -2.09 -0.01 -0.03 0.01
CFNAI 3-Month Moving Average 0.07 0.35 -0.11 -7.38 -- -- --
CFNAI Diffusion Index 0.22 0.32 0.17 -0.62 0.19 -0.14 0.16
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