Global| Mar 24 2014U.S. Chicago Fed National Activity Index Recovers Modestly
by:Tom Moeller
|in:Economy in Brief
Summary
The Chicago Federal Reserve reported that its National Activity Index (CFNAI) returned to positive territory last month. The gain to 0.14 followed a January reading of -0.45, revised from -0.39, which was the second consecutive [...]
The Chicago Federal Reserve reported that its National Activity Index
(CFNAI) returned to positive territory last month. The gain to 0.14
followed a January reading of -0.45, revised from -0.39, which was the
second consecutive negative figure. The latest reading was down from
November's high of 0.75. Despite its recent improvement, the three-month
moving average fell to -0.18, the lowest level since May. During the last
ten years, there has been an 80% correlation between the Chicago Fed Index
and the q/q change in real GDP.
Improvement in the overall index was led by the Production & Income reading which bounced up to 0.26 from -0.38. Showing moderate gain was the Sales, Orders & Inventories series, to 0.06 versus 0.00, and the Personal Consumption & Housing reading, to -0.16 from -0.19. To the downside, the Employment, Unemployment & Hours index fell to -0.02 from 0.11, its first negative figure since April. The Chicago Fed reported that during February, 54 of the 85 individual indicators made positive contributions to the overall index 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.
| Chicago Federal Reserve Bank | Feb | Jan | Dec | Feb'13 | 2013 | 2012 | 2011 |
|---|---|---|---|---|---|---|---|
| CFNAI | 0.14 | -0.45 | -0.24 | -0.49 | -0.02 | -0.07 | -0.07 |
| 3-Month Moving Average | -0.18 | 0.02 | 0.20 | 0.05 | -- | -- | -- |
| Personal Consumption & Housing | -0.16 | -0.19 | -0.17 | -0.14 | -0.15 | -0.21 | -0.29 |
| Employment, Unemployment & Hours | -0.02 | 0.11 | 0.01 | 0.30 | 0.09 | 0.10 | 0.13 |
| Production & Income | 0.26 | -0.38 | 0.00 | 0.29 | 0.02 | 0.04 | 0.05 |
| Sales, Orders & Inventories | 0.06 | 0.00 | -0.08 | 0.04 | 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.
