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Economy in Brief

Chicago Fed National Activity Index Rebounds in January
by Winnie Tapasanun  February 24, 2022

• January CFNAI at 0.69, a three-month high, indicates a pickup in U.S. economic growth.

• Two of four components decline slightly, but all four show positive readings.

The Chicago Fed National Activity Index (CFNAI) was at 0.69 in January, up from 0.07 in December (-0.15 initially) and 0.51 in November (0.44 initially), according to the Federal Reserve Bank of Chicago, pointing to a pickup in U.S. economic growth. The January 0.69 reading was the highest level since October but down from 1.24 in January 2021.

The index's three-month moving average (CFNAI-MA3), which smooths out the m/m volatility in the index, slipped to 0.42 in January from 0.46 in December. During the last 10 years, there has been 76% correlation between the change in the Chicago Fed Index and quarterly growth in real GDP.

The Production & Income index recovered to 0.29 in January, a three-month high, from -0.10 in December. The Personal Consumption & Housing index rebounded to 0.23, the highest level since March 2021, from -0.14. In contrast, the Employment, Unemployment & Hours component dipped to 0.14, the lowest level since August, from 0.19. The Sales, Orders & Inventories reading slipped to 0.03 from 0.11.

The CFNAI diffusion index, which measures the breadth of movement in the component series, was at 0.33 in January, slightly down from 0.45 in December and 0.44 in November. Fifty-seven of the 85 component series contributed positively and 28 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 February 22, 2022. January data for 51 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 Jan Dec Nov Jan '21 2021 2020 2019
Chicago Fed National Activity Index (+ = Growth Above Trend) 0.69 0.07 0.51 1.24 0.35 -0.48 -0.20
   Production & Income 0.29 -0.10 0.27 0.39 0.08 -0.13 -0.13
   Employment, Unemployment & Hours 0.14 0.19 0.27 0.14 0.20 -0.31 0.00
   Personal Consumption & Housing 0.23 -0.14 -0.04 0.40 0.05 -0.04 -0.02
   Sales, Orders & Inventories 0.03 0.11 0.02 0.30 0.03 0.00 -0.05
CFNAI 3-Month Moving Average 0.42 0.46 0.42 0.60 0.36 -0.52 -0.20
CFNAI Diffusion Index 0.33 0.45 0.44 0.42 0.31 0.20 -0.19
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