Global| Dec 21 2020Chicago Fed National Activity Index Pulls Back During November
by:Tom Moeller
|in:Economy in Brief
Summary
• Index suggests slower economic growth. • Components broadly weaken. Forward economic momentum retreated last month. The Federal Reserve Bank of Chicago's National Activity Index declined during November to 0.27 from 1.01 in October, [...]
• Index suggests slower economic growth.
• Components broadly weaken.
Forward economic momentum retreated last month. The Federal Reserve Bank of Chicago's National Activity Index declined during November to 0.27 from 1.01 in October, revised from 0.83. The index level was the lowest of seven consecutive positive readings.
The three-month moving average, which smoothes out the m/m volatility in the index, fell in November to 0.56 from 0.85 in October. During the last 20 years, there has been a 76% correlation between the Chicago Fed Index and quarterly growth in real GDP.
Each of the four index components weakened last month. The Employment, Unemployment & Income series fell to its lowest level in the last six months. The Sales, Orders & Inventories also fell sharply. The Production & Income series reversed much of October's improvement. The Personal Consumption & Housing series fell into negative territory. The diffusion index, which measures the breadth of movement in the components, decreased to 0.53 from 0.62 as 64 of the 85 components deteriorated.
The CFNAI is a weighted average of 85 monthly 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.
These figures are available in Haver's SURVEYS database.
| Federal Reserve Bank of Chicago | Nov | Oct | Sep | Nov '19 | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|
| Chicago Fed National Activity Index (+ = Growth Above Trend) | 0.27 | 1.01 | 0.40 | 0.29 | -0.14 | 0.12 | 0.13 |
| Production & Income | 0.14 | 0.36 | -0.03 | 0.28 | -0.11 | 0.07 | 0.06 |
| Employment, Unemployment & Hours | 0.15 | 0.45 | 0.33 | 0.01 | 0.01 | 0.08 | 0.06 |
| Personal Consumption & Housing | -0.09 | 0.02 | 0.09 | -0.02 | -0.02 | -0.04 | -0.03 |
| Sales, Orders & Inventories | 0.07 | 0.17 | 0.02 | 0.02 | -0.03 | 0.01 | 0.04 |
| CFNAI 3-Month Moving Average | 0.56 | 0.85 | 1.40 | -0.15 | -- | -- | -- |
| CFNAI Diffusion Index | 0.53 | 0.62 | 0.59 | -0.14 | -0.11 | 0.15 | 0.13 |
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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