Global| Nov 25 2019Chicago Fed National Activity Index Declines Again
by:Tom Moeller
|in:Economy in Brief
Summary
The Federal Reserve Bank of Chicago reported that its National Activity Index fell to -0.71 during October from an unrevised -0.45 in September. It was the lowest level in six months. The three-month moving average smoothes out [...]
The Federal Reserve Bank of Chicago reported that its National Activity Index fell to -0.71 during October from an unrevised -0.45 in September. It was the lowest level in six months. The three-month moving average smoothes out volatility in the monthly figures. It deteriorated to -0.31 last month, the lowest level since April. The figure remained below the December 2017 high of 0.51. During the last twenty years, there has been a 70% correlation between the Chicago Fed Index and the q/q change in real GDP.
The National Activity Diffusion Index, which measures the breadth of movement in the monthly series, was little changed at -0.22. It remained below the peak of 0.51 in December 2017.
Movement in the component series of the National Activity Index was mixed during October. Deterioration in the Production & Income series dominated the overall index decline as it fell to -0.55, a six-month low and down from August's high of 0.18. The Employment, Unemployment & Hours series fell to -0.10, the lowest point since February. Showing some m/m improvement was the Personal Consumption & Housing Index of -0.03 after September's drop to -0.05. The Sales, Orders & Inventories reading of -0.03 compared to -0.04, remained below the high of 0.21 reached in January.
The CFNAI is a weighted average of 85 indicators of national economic activity. It is constructed to have an average value of zero and a standard deviation of one. Since economic activity tends toward trend growth rate over time, a positive index reading corresponds to growth above trend and a negative index reading corresponds to growth below trend.
The Chicago Federal Reserve figures are available in Haver's SURVEYS database.
| Chicago Federal Reserve Bank | Oct | Sep | Aug | Oct '18 | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|---|---|
| National Activity Index (percent) | -0.71 | -0.45 | 0.23 | 0.02 | 0.18 | 0.16 | -0.11 |
| 3-Month Moving Average | -0.31 | -0.21 | -0.02 | 0.19 | -- | -- | -- |
| Diffusion Index | -0.22 | -0.24 | -0.09 | 0.16 | 0.17 | 0.09 | -0.19 |
| Production & Income | -0.55 | -0.36 | 0.18 | 0.00 | 0.09 | 0.08 | -0.06 |
| Employment, Unemployment & Hours | -0.10 | 0.01 | 0.03 | 0.17 | 0.12 | 0.08 | 0.02 |
| Personal Consumption & Housing | -0.03 | -0.05 | 0.00 | -0.03 | -0.06 | -0.05 | -0.07 |
| Sales, Orders & Inventories | -0.03 | -0.04 | 0.02 | -0.13 | 0.02 | 0.05 | -0.01 |
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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