Global| Jun 23 2011Chicago Fed Index Remains Negative
by:Tom Moeller
|in:Economy in Brief
Summary
As soft as economic growth was in Q1, this quarter looks no better. The Chicago Fed reported that its National Activity Index (CFNAI) remained negative at -0.37 in May following a little-revised -0.56 in April. The three-month moving [...]
As soft as economic growth was in Q1, this quarter looks no better. The Chicago Fed reported that its National Activity Index (CFNAI) remained negative at -0.37 in May following a little-revised -0.56 in April. The three-month moving average of the index, which smoothes out some of the series' volatility, also remained negative. During the last ten years there has been an 81% correlation between the index and the Q/Q change in real GDP.
Three of the component series was negative last month. Employment, unemployment & hours was at the lowest level since September. Personal consumption & housing and sales, orders & inventories were similarly weak. Production & income improved somewhat.
The CFNAI is a weighted average of 85 indicators of economic activity. An index level at or below -0.70 typically has indicated negative U.S. economic growth. A zero value of the CFNAI suggests that the economy is expanding at its historical trend rate of growth. During the last ten years it's had an 77% correlation with the quarterly growth in real GDP.
A separate index covering just the Midwest rose in April to its highest level in over ten years as the factory sector improved. The Chicago Federal Reserve figures are available in Haver's SURVEYS database.
| Chicago Federal Reserve Bank | May | Apr | Mar | May'10 | 2010 | 2009 | 2008 |
|---|---|---|---|---|---|---|---|
| CFNAI | -0.37 | -0.56 | 0.34 | 0.34 | -0.06 | -1.59 | -1.93 |
| 3-Month Moving Average | -0.19 | -0.15 | 0.08 | 0.31 | -- | -- | -- |
| Personal Consumption & Housing | -0.36 | -0.40 | -0.38 | -0.38 | -0.35 | -0.40 | -0.26 |
| Employment, Unemployment & Hours | -0.04 | -0.02 | 0.21 | 0.00 | 0.03 | -0.81 | -0.67 |
| Production & Income | 0.05 | -0.16 | 0.25 | 0.64 | 0.21 | -0.26 | -0.70 |
| Sales, Orders & Inventories | -0.02 | 0.02 | 0.26 | -0.15 | 0.06 | -0.12 | -0.29 |
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.
