Global| Sep 27 2010Chicago Fed Index Gives Back Its Earlier Improvement
by:Tom Moeller
|in:Economy in Brief
Summary
The August National Activity Index (CFNAI), reported by the Chicago Fed, backpedaled and returned to nearly its lowest level of the economic recovery. The decline to -0.53 was from a revised -0.11 during July and indicated that [...]
The August National Activity Index (CFNAI), reported by the Chicago Fed, backpedaled and returned to
nearly its lowest level of the economic recovery. The decline to
-0.53 was from a revised -0.11 during July and indicated that
forward momentum behind the U.S. recovery has waned considerably.
The three-month moving average of the index,
which smoothes out some of the series' volatility, fell to -0.42,
its lowest level since December.
Since these figures remain up from the low of -4.10 reached in January '09, they still represent improvement. 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.
The Chicago Fed indicated that most of the August deterioration resulted from declines in the values for employment as well as production & income. The other component series were roughly flat. Thirty-four of the 85 individual indicators made positive contributions to the index in August, while 51 had a negative effect. The Fed also indicated that 42 indicators improved from July to August, while 42 indicators deteriorated and one was unchanged.
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 during July improved to its highest level since December 2008. Indicators for the auto and steel sectors improved sharply. The Chicago Federal Reserve figures are available in Haver's SURVEYS database.
Implications of the Financial Crisis for Economics is the title of Friday's speech by Fed Chairman Ben S. Bernanke and it can be found here.
| Chicago Fed | August | July | June | August'09 | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|---|---|
| CFNAI | -0.53 | -0.11 | -0.63 | -0.56 | -1.55 | -1.85 | -0.29 |
| 3-Month Moving Average | -0.42 | -0.27 | -0.11 | -0.79 | -- | -- | -- |
| Personal Consumption & Housing | -0.40 | -0.44 | -0.45 | -0.31 | -0.44 | -0.29 | -0.09 |
| Employment,
Unemployment & Hours |
-0.12 | 0.09 | -0.14 | -0.53 | -0.77 | -0.67 | -0.16 |
| Production & Income | 0.00 | 0.23 | -0.07 | 0.53 | -0.21 | -0.60 | -0.05 |
| Sales, Orders & Inventories | -0.01 | 0.01 | 0.04 | -0.24 | -0.11 | -0.28 | -0.03 |
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.
