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Economy in Brief

Chicago Fed National Activity Index Turns Negative in December
by Tom Moeller  January 24, 2022

• First negative reading since April 2021.

• Production & personal consumption again lead downturn.

• Trend level of total index weakens.

The Chicago Fed National Activity Index (CFNAI) dropped to -0.15 during December from 0.44 in November, revised from 0.37. In 2021, the index improved to 0.33 from -0.48 in 2020.

The index's three-month moving average eased in December to 0.33 from 0.40. During the last 10 years, there has been an 75% correlation between the change in the Chicago Fed Index and quarterly growth in real GDP.

The Personal Consumption & Housing component moved lower to -0.19 from -0.02 in November. The Production & Income component weakened to -0.13 from 0.25 in November. The Employment, Unemployment & Hours component eased to 0.13 from 0.16. The Sales, Orders & Inventories index slipped to 0.03 from 0.05 in November.

The CFNAI diffusion index, which measures the breadth of movement in the component series, fell to 0.37 in December from 0.42 in November. The diffusion index averaged 0.28 in 2021, up from 0.19 in 2020.

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 October 25, 2021. Fifty of the 85 indicators had been published at that time. For all missing data, estimates were used in constructing the index.

The index is constructed by the Federal Reserve Bank of Chicago. These figures are available in Haver's SURVEYS database.

Federal Reserve Bank of Chicago Dec Nov Oct Dec '20 2021 2020 2019
Chicago Fed National Activity Index (+ = Growth Above Trend) -0.15 0.44 0.70 0.30 0.33 -0.48 -0.20
   Production & Income -0.13 0.25 0.31 0.35 0.07 -0.13 -0.13
   Employment, Unemployment & Hours 0.13 0.16 0.26 0.01 0.19 -0.31 -0.00
   Personal Consumption & Housing -0.19 -0.02 0.06 -0.10 0.04 -0.04 -0.02
   Sales, Orders & Inventories 0.03 0.05 0.07 0.03 0.02 0.00 -0.05
CFNAI 3-Month Moving Average 0.33 0.40 0.25 0.55 0.35 -0.51 -0.20
CFNAI Diffusion Index 0.37 0.42 0.23 0.48 0.28 0.19 -0.18
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