Global| Jan 23 2014U.S. Chicago Fed National Activity Index Pulls Back
by:Tom Moeller
|in:Economy in Brief
Summary
The Chicago Federal Reserve reported that its National Activity Index (CFNAI) reversed most of its earlier increase and fell to 0.16 last month from 0.69 during November. As a result of the monthly decline, the three-month moving [...]
The Chicago Federal Reserve reported that its National Activity Index (CFNAI) reversed most of its earlier increase and fell to 0.16 last month from 0.69 during November. As a result of the monthly decline, the three-month moving average slipped to 0.33 but still was near the highest level since early 2012. During the last ten years, there has been an 80% correlation between the Chicago Fed Index and the q/q change in real GDP.
Monthly changes in the index components were mostly negative. The Employment, Unemployment & Hours index showed the greatest m/m deterioration with a decline to 0.10 from 0.35 while the Production & Income series also backpedaled to 0.14 from 0.36. The Personal Consumption & Housing index fell to -0.15 versus -0.07 and the Sales, Orders & Inventories series was unchanged at 0.06. The Chicago Fed reported that during December, 47 of the 85 individual indicators made positive contributions to the overall index while 38 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.
| Chicago Federal Reserve Bank | Dec | Nov | Oct | Dec'12 | 2013 | 2012 | 2011 |
|---|---|---|---|---|---|---|---|
| CFNAI | 0.16 | 0.69 | 0.12 | 0.14 | 0.00 | -0.07 | -0.07 |
| 3-Month Moving Average | 0.33 | 0.36 | 0.20 | 0.17 | -- | -- | -- |
| Personal Consumption & Housing | -0.15 | -0.07 | -0.11 | -0.14 | -0.15 | -0.21 | -0.29 |
| Employment, Unemployment & Hours | 0.10 | 0.35 | -0.02 | 0.10 | 0.08 | 0.10 | 0.14 |
| Production & Income | 0.14 | 0.36 | 0.16 | 0.21 | 0.05 | 0.04 | 0.05 |
| Sales, Orders & Inventories | 0.06 | 0.06 | 0.10 | -0.02 | 0.03 | -0.01 | 0.03 |
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.
