Global| Sep 26 2011U.S. Chicago Fed Index Returns To Negative Territory
by:Tom Moeller
|in:Economy in Brief
Summary
Economic momentum, one way or the other, is something the U.S. economy can't muster. The Chicago Fed's National Activity Index (CFNAI) was a negative 0.43 in August. That followed a marginally positive July number which was revised up [...]
Economic momentum, one way or the other, is something the U.S. economy
can't muster. The Chicago Fed's National Activity Index (CFNAI) was a
negative 0.43 in August. That followed a marginally positive July number
which was revised up from the slightly negative reading reported last
month. The three-month moving average remained weak at -0.28 for August,
up slightly from the -0.56 low reported for June. During the last ten
years there has been an 80% correlation between the Chicago Fed Index and
the q/q change in real GDP.
The Employment, Unemployment & Hours component reentered negative territory after a brief July Improvement. The Production & Income series also showed great deterioration with its return to a negligible 0.01. The Personal Consumption & Housing component of the index deteriorated slightly last month to -0.35 and was not far above the 2009 low of -0.52. Rounding out the story of economic weakness was the Sales, Orders & Inventories series at -0.01; again no expansion, no decline.
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. During August, 41 of the 85 component series made a positive contribution to the overall index while 44 made a negative contribution.
The Chicago Federal Reserve figures are available in Haver's SURVEYS database.
Monetary Policy And Job Creation is the title of this morning's speech by Fed Governor Sarah Bloom Raskin and it can be found here.
| Chicago Federal Reserve Bank | Aug | Jul | Jun | Aug'10 | 2010 | 2009 | 2008 |
|---|---|---|---|---|---|---|---|
| CFNAI | -0.43 | 0.02 | -0.44 | -0.47 | -0.02 | -1.63 | -1.94 |
| 3-Month Moving Average | -0.28 | -0.27 | -0.56 | -0.23 | -- | -- | -- |
| Personal Consumption & Housing | -0.35 | -0.33 | -0.33 | -0.31 | -0.34 | -0.38 | -0.26 |
| Employment, Unemployment & Hours | -0.08 | 0.12 | -0.09 | -0.09 | 0.03 | -0.81 | -0.67 |
| Production & Income | 0.01 | 0.26 | -0.08 | 0.02 | 0.22 | -0.27 | -0.70 |
| Sales, Orders & Inventories | -0.01 | -0.03 | 0.05 | -0.06 | 0.07 | -0.16 | -0.31 |
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.
