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Economy in Brief

Chicago Fed National Activity Index Indicates Slower Growth in June
by Tom Moeller  July 22, 2021

• Overall activity reading is barely positive.

• Three of four components rose slightly.

The Federal Reserve Bank of Chicago's National Activity Index declined to 0.09 during June from 0.26 in May, revised from 0.29.

The three-month moving average, which smoothes out the m/m volatility in the index, fell to 0.13 last month after rising to 0.40 in May. During the last 10 years, there has been 89% correlation between the level of the Chicago Fed Index and quarterly growth in real GDP.

The Production & Income component eased to 0.01 in June from 0.26 in May. The Employment, Unemployment & Hours component weakened to 0.09 last month after rising to 0.15 in May. The Sales, Orders & Inventories reading improved to 0.06 from -0.04. The Personal Consumption & Housing series stood at -0.08 in June, negative for the second straight month. The CFNAI diffusion index, which measures the breadth of movement in the component series, declined to 0.13 from 0.40 in May. A lessened 45 of the 85 component series contributed positively and an increased 40 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 July 20, 2021. At that time, May 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 Jun May Apr Jun'20 2020 2019 2018
Chicago Fed National Activity Index (+ = Growth Above Trend) 0.09 0.26 -0.16 5.88 -0.48 -0.18 0.07
   Production & Income 0.01 0.26 -0.11 2.21 -0.13 -0.13 0.03
   Employment, Unemployment & Hours 0.09 0.15 0.05 1.94 -0.31 -0.00 0.08
   Personal Consumption & Housing -0.08 -0.11 0.00 0.46 -0.04 -0.02 -0.04
   Sales, Orders & Inventories 0.06 -0.04 -0.10 1.27 -0.00 -0.03 0.01
CFNAI 3-Month Moving Average 0.06 0.80 0.16 -2.40 -- -- --
CFNAI Diffusion Index 0.13 0.40 0.15 0.16 0.19 -0.17 0.07
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