Global| Oct 26 2009Chicago Fed Index Dipped Last Month But Trend Level Still Rising
by:Tom Moeller
|in:Economy in Brief
Summary
The Chicago Federal Reserve Bank indicated that while the U.S. economy had improved, growth was still below the historic trend. For September, the Chicago Fed National Activity Index (CFNAI) slipped m/m after having improved sharply [...]
The Chicago Federal Reserve
Bank indicated that while the U.S.
economy had improved, growth was still below the historic trend. For
September, the Chicago Fed National Activity Index (CFNAI) slipped m/m
after having improved sharply from the January low. The reading of
-0.90 was down from -0.56 during August yet both readings were up
sharply from the series' low of -4.13 reached this past January. Since
1970 there has been a 74% correlation between the level of the index
and the q/q change in real GDP but during the last ten years that
correlation has risen to 80%.
The three-month moving average which smoothes out some of the volatility of the index improved to its highest level since June of '08.
An index level at or below -0.70 typically has indicated negative U.S. economic growth. A zero value of the CFNAI indicates that the economy is expanding at its historical trend rate of growth of roughly 3%. The complete CFNAI report is available here.
The Chicago Fed indicated that 32 of the series' individual
indicators made positive contributions to the September index while 53
made negative contributions. The CFNAI is a weighted average of 85
indicators of economic activity. The indicators reflect activity in the
following categories: production & income, the labor market,
personal consumption & housing, manufacturing & trade
sales, and inventories & orders.
In a separate survey, the Chicago Fed indicated that its Midwest manufacturing index slipped during August but remained near its lowest since late-1993. Indicators for the steel, machinery and resource sectors improved modestly, however, that was outweighed by deterioration in the auto sector. The Chicago Federal Reserve figures are available in Haver's SURVEYS database.
International Perspective on the Crisis and Response is the title of Friday's speech by Fed Vice-Chairman Donald L. Kohn and it can be found here here
| Chicago Fed | September | August | July | August '08 | 2008 | 2007 | 2006 |
|---|---|---|---|---|---|---|---|
| CFNAI | -0.90 | -0.56 | -1.82 | -2.01 | -1.77 | -0.35 | 0.05 |
| 3-Month Moving Average | -1.09 | -1.61 | -2.15 | -1.42 | -- | -- | -- |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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