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Economy in Brief

Chicago Fed National Activity Index Improves in April
by Tom Moeller  May 23, 2022

• Three of four major components rise marginally m/m.

• Three-month moving average slips.

The Federal Reserve Bank of Chicago reported that the Chicago Fed National Activity Index (CFNAI) rose to 0.47 during April and made up half of its March decline to 0.36, revised from 0.44.

The index's three-month moving average eased 0.48 from 0.49 in March. During the last 10 years, there has been 76% correlation between the change in the Chicago Fed Index and quarterly growth in real GDP.

Three of the four index's major components improved from March levels and all were positive. The Production & Income index rose 0.26 in April after falling to 0.20 in March and from February's four-month high of 0.40. The Sales, Orders & Inventories reading rose to 0.04 last month following two consecutive negative monthly readings. The Personal Consumption & Housing index rose to 0.08, its highest level in three months. The Employment, Unemployment & Hours component fell to 0.10 last month, the lowest level in ten months and down from the 0.37 high last July.

The CFNAI diffusion index, which measures the breadth of movement in the component series, rose to 0.48 during April, up from lows of 0.29 in both January & February. Sixty-two of the 85 component series contributed positively to the overall index and 23 contributed negatively.

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 March 17, 2022. February data for 50 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.

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