Global| Jan 27 2011Chicago Fed Index Turns Positive
by:Tom Moeller
|in:Economy in Brief
Summary
The Chicago Fed reported that its National Activity Index (CFNAI) rose last month to 0.03. It was the first positive figure since July. However, the index remained down sharply since its March peak, suggesting that the economy's [...]
The Chicago Fed reported that its National Activity Index (CFNAI) rose last month to 0.03. It was the first positive figure since July. However, the index remained down sharply since its March peak, suggesting that the economy's recovery has lost forward momentum. The three-month moving average of the index, which smoothes out some of the series' volatility, improved to -0.22.
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 78% correlation with the quarterly growth in real GDP.
The CFNAI is a weighted average of 85 indicators of economic activity. The Chicago Fed indicated that December's improvement was due mostly to the labor market series and the production & income numbers. Other indicators were roughly stable or improved. Forty-five of the 85 individual indicators made positive contributions to the index in December, while 40 had a negative effect. The Fed also indicated that 48 indicators improved from October to November, while 36 indicators deteriorated.
In a separate survey, the Chicago Fed indicated that its Midwest manufacturing index during December improved slightly m/m to its highest since December 2008. Indicators for the steel, machinery and resource sectors increased m/m while autos slipped. The Chicago Federal Reserve figures are available in Haver's SURVEYS database.
| Chicago Federal Reserve Bank | Dec | Nov | Oct | Dec '09 | 2010 | 2009 | 2008 |
|---|---|---|---|---|---|---|---|
| CFNAI | 0.03 | -0.40 | -0.30 | 0.44 | -0.11 | -1.53 | -1.85 |
| 3-Month Moving Average | -0.22 | -0.36 | -0.39 | -0.41 | -- | -- | -- |
| Personal Consumption & Housing | -0.43 | -0.39 | -0.37 | -0.40 | -0.38 | -0.42 | -0.28 |
| Employment, Unemployment & Hours | 0.15 | -0.11 | 0.11 | -0.25 | 0.05 | -0.78 | -0.67 |
| Production & Income | 0.26 | 0.04 | 0.02 | 0.12 | 0.18 | -0.21 | -0.61 |
| Sales, Orders & Inventories | 0.05 | 0.04 | -0.06 | 0.10 | 0.04 | -0.11 | -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.
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