Global| Jan 22 2016Chicago Fed National Activity Index Indicates Subpar Economic Growth
by:Tom Moeller
|in:Economy in Brief
Summary
The Chicago Federal Reserve reported that its National Activity Index (CFNAI) during December remained negative at -0.22 following -0.36 in November, revised from -0.30. The 3-month moving average declined to -0.24, its weakest [...]
The Chicago Federal Reserve reported that its National Activity Index (CFNAI) during December remained negative at -0.22 following -0.36 in November, revised from -0.30. The 3-month moving average declined to -0.24, its weakest reading since March. It indicated that economic growth was below its long-term trend. During the last ten years, there has been a 77% correlation between the Chicago Fed Index and the q/q change in real GDP.
Movement in the four component series of the overall index was mixed last month. The Production & Income reading at -0.26 remained near its lowest level since January 2014. Sales, Orders & Inventories remained little-changed at -0.02, negative for the fourth month in the last five. The Personal Consumption & Housing figure eased to -0.07, though that remained near the cycle's high. Employment, Unemployment and Hours held at the 2015 high of 0.12. The Fed reported that 35 of the 85 component series made positive contributions to the total while 50 made negative contributions.
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 | Dec | Nov | Oct | Dec'14 | 2015 | 2014 | 2013 |
|---|---|---|---|---|---|---|---|
| National Activity Index (percent) | -0.22 | -0.36 | -0.14 | 0.13 | -0.13 | 0.21 | -0.05 |
| 3-Month Moving Average | -0.24 | -0.19 | -0.16 | 0.40 | -- | -- | -- |
| Personal Consumption & Housing | -0.07 | -0.05 | -0.12 | -0.11 | -0.09 | -0.11 | -0.15 |
| Employment, Unemployment & Hours | 0.12 | 0.12 | 0.07 | 0.22 | 0.07 | 0.18 | 0.10 |
| Production & Income | -0.26 | -0.40 | -0.03 | -0.08 | -0.11 | 0.11 | -0.02 |
| Sales, Orders & Inventories | -0.02 | -0.03 | -0.07 | 0.09 | -0.01 | 0.04 | 0.02 |
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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