Global| Mar 23 2020Chicago Fed National Activity Index Suggests Growth Picked Up in February
by:Tom Moeller
|in:Economy in Brief
Summary
The Chicago Federal Reserve Bank indicated that these February figures likely were not much influenced by the COVID-19 outbreak. It reported that its National Activity Index (CFNAI) improved to 0.16 last month from -0.33 in January, [...]
The Chicago Federal Reserve Bank indicated that these February figures likely were not much influenced by the COVID-19 outbreak.
It reported that its National Activity Index (CFNAI) improved to 0.16 last month from -0.33 in January, revised from -0.25. February's was the first positive reading in three months. The three-month moving average of the index eased m/m to -0.21, but still was improved from the low of -0.52 last April. During the last 20 years, there has been a 70% correlation between the index and the q/q change in real GDP.
The rise in the February index reflected a sharp rise in the Production & Income component to 0.11 from -0.34 in January. It was the first positive figure in three months. The Employment, Unemployment & Hours series edged higher to 0.05 from 0.01, the best reading since September 2019. Working the other way, the Personal Consumption & Housing gauge slipped to 0.02 from 0.03, which was the highest level in 12 months. The Sales, Orders and Inventories measure eased to -0.03 from -0.02.
The diffusion index of the CFNAI, which measures the breadth of component change, fell to -0.20.
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 | Feb | Jan | Dec | Feb '19 | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|
| National Activity Index (+ = Growth Above Trend) | 0.16 | -0.33 | -0.46 | -0.65 | -0.25 | 0.16 | 0.16 |
| Production & Income | 0.11 | -0.34 | -0.32 | -0.30 | -0.17 | 0.09 | 0.08 |
| Employment, Unemployment & Hours | 0.05 | 0.01 | -0.08 | 0.06 | -0.01 | 0.10 | 0.07 |
| Personal Consumption & Housing | 0.02 | 0.03 | 0.00 | -0.14 | -0.03 | -0.06 | -0.05 |
| Sales, Orders & Inventories | -0.03 | -0.02 | -0.07 | -0.07 | -0.04 | 0.03 | 0.05 |
| 3-Month Moving Average | -0.21 | -0.11 | -0.22 | -0.25 | -- | -- | -- |
| Diffusion Index | -0.20 | -0.11 | -0.19 | -0.16 | -0.16 | 0.15 | 0.08 |
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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