Global| Dec 24 2018Chicago Fed National Activity Index Recovers M/M; Trend Deteriorates
by:Tom Moeller
|in:Economy in Brief
Summary
The Federal Reserve Bank of Chicago reported that its November National Activity index increased to 0.22 following deterioration in October to 0.00, revised from 0.24. Working lower, however, was the three-month moving average to [...]
The Federal Reserve Bank of Chicago reported that its November National Activity index increased to 0.22 following deterioration in October to 0.00, revised from 0.24. Working lower, however, was the three-month moving average to 0.12, its lowest point since July. During the last ten years, there has been a 77% correlation between the Chicago Fed Index and the q/q change in real GDP.
The National Activity Index Diffusion Index, which measures the breadth of movement in the monthly series, deteriorated to 0.06. That was the lowest level since September of last year and down from the peak of 0.35 in November of last year.
Monthly improvement in the November index was led by the Production and Income series to 0.08 from -0.09, though figure remained down substantially versus last year. The Sales, Orders and Inventories reading improved to 0.09, but remained below its earlier peak. The Personal Consumption & Housing reading showed minimal improvement m/m and remained negative. The Employment, Unemployment & Hours series deteriorated to 0.10 from 0.15. It has been moving sideways all year suggesting moderate growth in payrolls.
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 | Nov | Oct | Sep | Nov '17 | 2017 | 2016 | 2015s |
|---|---|---|---|---|---|---|---|
| National Activity Index (percent) | 0.22 | 0.00 | 0.15 | 0.35 | 0.13 | -0.12 | -0.26 |
| 3-Month Moving Average | 0.12 | 0.23 | 0.31 | 0.45 | -- | -- | -- |
| Diffusion Index | 0.06 | 0.21 | 0.24 | 0.35 | 0.06 | -0.20 | -0.15 |
| Production & Income | 0.08 | -0.09 | 0.05 | 0.15 | 0.05 | -0.07 | -0.21 |
| Employment, Unemployment & Hours | 0.10 | 0.15 | 0.05 | 0.09 | 0.08 | 0.02 | 0.07 |
| Personal Consumption & Housing | -0.05 | -0.04 | -0.06 | -0.02 | -0.05 | -0.07 | -0.08 |
| Sales, Orders & Inventories | 0.09 | -0.02 | 0.11 | 0.13 | 0.05 | -0.00 | -0.04 |
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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