Global| Sep 24 2012U.S. Chicago Fed Index Falls To Its Lowest Level Since The Last Recession
by:Tom Moeller
|in:Economy in Brief
Summary
The recession has been revisited. The National Activity Index (CFNAI) from the Chicago Federal Reserve deteriorated to -0.87 during August from a little revised -0.12 in July. The latest reading was the lowest since June 2009, the [...]
The recession has been revisited. The National Activity Index (CFNAI)
from the Chicago Federal Reserve deteriorated to -0.87 during August from
a little revised -0.12 in July. The latest reading was the lowest since
June 2009, the last month of the recession. The three-month moving
average fell to -0.47, the lowest level since November 2009. During the
last ten years, there has been an 81% correlation between the Chicago Fed
Index and the q/q change in real GDP.
Monthly deterioration in last month's index was driven largely by a lower Production & Income component to -0.58, also its lowest level since the recession. That figure reflected the sharp 4.7% m/m drop in the output of automotive products reported by the Fed earlier this month. The other index components remained lackluster. The Employment, Unemployment & Hours component slipped to -0.04, down sharply from its January high of 0.37. The Sales, Inventories & Orders component also waffled at -0.01. The Personal Consumption & Housing series remained up from the recession low despite the m/m slip to -0.23. The Chicago Fed reported that in August, 26 of the 85 individual indicators made positive contributions to the index while 59 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.
One-Size-Fits-All Monetary Policy: Europe and the U.S. from the Federal Reserve Bank of Dallas is available here.
| Chicago Federal Reserve Bank | Aug | Jul | Jun | Aug '11 | 2011 | 2010 | 2009 |
|---|---|---|---|---|---|---|---|
| CFNAI | -0.87 | -0.12 | -0.43 | -0.40 | 0.03 | -0.01 | -1.63 |
| 3-Month Moving Average | -0.47 | -0.26 | -0.23 | -0.14 | -- | -- | -- |
| Personal Consumption & Housing | -0.23 | -0.21 | -0.28 | -0.35 | -0.31 | -0.30 | -0.35 |
| Employment, Unemployment & Hours | -0.04 | -0.02 | -0.03 | -0.09 | 0.12 | 0.03 | -0.82 |
| Production & Income | -0.58 | 0.08 | 0.02 | 0.01 | 0.09 | 0.22 | -0.29 |
| Sales, Orders & Inventories | -0.01 | 0.02 | -0.14 | 0.02 | 0.04 | 0.09 | -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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