Global| Mar 26 2012U.S. Chicago Fed Index Deteriorates M/M But Trend Is Positive
by:Tom Moeller
|in:Economy in Brief
Summary
The February National Activity Index (CFNAI) from the Chicago Federal Reserve reversed its earlier improvement and returned to negative territory. The index fell to -0.09 from 0.33 in January which was revised higher, as was [...]
The February National Activity Index (CFNAI) from the Chicago
Federal Reserve reversed its earlier improvement and returned to
negative territory. The index fell to -0.09 from 0.33 in January
which was revised higher, as was December's reading. Improving,
however, was the three-month moving average as it rose to 0.30, its
highest since April 2010. During the last ten years there has
been an 81% correlation between the Chicago Fed Index and the q/q
change in real GDP.
A lower Production & Income component again was behind most of the m/m deterioration in the total. Reversing two months of improvement was the Employment, Unemployment & Hours series. Production & Income also fell to its lowest since November. Personal Consumption & Housing was still negative and Sales, Orders & Inventories were fairly constant m/m. The Chicago Fed reported that fifty-two of the 85 individual indicators made positive contributions to the index in January while 33 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.
Recent Developments in the Labor Market is this morning's speech by Fed Chairman Ben S. Bernanke and it is available here.
| Chicago Federal Reserve Bank | Feb | Jan | Dec | Feb'11 | 2011 | 2010 | 2009 |
|---|---|---|---|---|---|---|---|
| CFNAI | -0.09 | 0.33 | 0.66 | -0.33 | -0.07 | 0.00 | -1.62 |
| 3-Month Moving Average | 0.30 | 0.22 | 0.12 | 0.12 | -- | -- | -- |
| Personal Consumption & Housing | -0.27 | -0.29 | -0.29 | -0.36 | -0.32 | -0.32 | -0.36 |
| Employment, Unemployment & Hours | 0.18 | 0.36 | 0.28 | 0.36 | 0.12 | 0.04 | -0.82 |
| Production & Income | -0.01 | 0.30 | 0.51 | -0.10 | 0.09 | 0.22 | -0.27 |
| Sales, Orders & Inventories | 0.01 | -0.03 | 0.15 | -0.22 | 0.04 | 0.07 | -0.16 |
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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