Global| Oct 25 2006Negative Readings from the Chicago Fed & the Richmond Fed
by:Tom Moeller
|in:Economy in Brief
Summary
The National Activity Index (CFNAI) from the Federal Reserve Bank of Chicago dropped to a negative 0.51 in September, the third negative monthly reading in a row. As a result, the three-month moving average of the CFNAI fell to -0.25, [...]
The National Activity Index (CFNAI) from the Federal Reserve Bank of Chicago dropped to a negative 0.51 in September, the third negative monthly reading in a row. As a result, the three-month moving average of the CFNAI fell to -0.25, its first negative value in a year.
A zero value of the CFNAI indicates that the economy is expanding at its historical trend rate of growth. During the last twenty years there has been a 68% correlation between the level of the CFNAI and q/q growth in real GDP.
The CFNAI is a weighted average of 85 indicators of economic activity. The indicators reflect activity in the following categories: production and income, the labor market, personal consumption and housing, manufacturing and trade sales, and inventories & orders.
The latest CFNAI report is available here.
The Federal Reserve Bank of Richmond also indicated that its October Composite Index from the manufacturing survey at -2 was at its lowest level since January. During the last ten years there has been a 38% correlation between the diffusion index level and the one month change in U.S. manufacturing industrial production. The October report can be found here.
The Richmond Fed's survey of the service sector also fell m/m but remained in positive territory. The percentage of firms reporting increasing revenues fell to 5%, the lowest percentage since July, but the percentage of employees held at a high 13%. The latest report is available here.
| Chicago Fed | September | August | Sept. '05 | 2005 | 2004 | 2003 |
|---|---|---|---|---|---|---|
| CFNAI | -0.51 | -.06 | -0.74 | 0.20 | 0.36 | -0.15 |
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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