Global| Apr 29 2011Chicago Fed Index Turns Positive
by:Tom Moeller
|in:Economy in Brief
Summary
The Chicago Fed reported that its National Activity Index (CFNAI) improved to a positive 0.26 last month. The gain was versus upwardly revised, positive readings this year that previously were reported as negative. Nevertheless, the [...]
The Chicago Fed reported that its National Activity Index (CFNAI) improved to a positive 0.26 last month. The gain was versus upwardly revised, positive readings this year that previously were reported as negative. Nevertheless, the index remained down from its March '10 peak. The three-month moving average of the index, which smoothes out some of the series' volatility, slipped to 0.20 from is early-2010 high. During the last ten years there has been an 81% correlation between the index and the Q/Q change in real GDP.
March strength in the production & income component offset the negative personal consumption & housing series. Also, the jobs figure fell m/m.
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 Midwest manufacturing activity jumped to its highest level since October 2008 due to broad-based improvement amongst sectors, notably autos. The Chicago Federal Reserve figures are available in Haver's SURVEYS database.
Output Gaps: Uses and Limitations from the Federal Reserve Bank of Philadelphia can be found here
| Chicago Federal Reserve Bank | Mar | Feb | Jan | Mar'10 | 2010 | 2009 | 2008 |
|---|---|---|---|---|---|---|---|
| CFNAI | 0.26 | 0.16 | 0.18 | 0.51 | -0.06 | -1.59 | -1.93 |
| 3-Month Moving Average | 0.20 | 0.27 | 0.15 | 0.05 | -- | -- | -- |
| Personal Consumption & Housing | -0.39 | -0.42 | -0.37 | -0.28 | -0.35 | -0.40 | -0.26 |
| Employment, Unemployment & Hours | 0.18 | 0.42 | 0.09 | 0.19 | 0.03 | -0.81 | -0.67 |
| Production & Income | 0.39 | 0.11 | 0.26 | 0.30 | 0.22 | -0.26 | -0.70 |
| Sales, Orders & Inventories | 0.08 | 0.05 | 0.24 | 0.30 | 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.
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