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Economy in Brief

U.S. Chicago Fed Index Edges Higher
by Tom Moeller November 21, 2011

The Chicago Fed's National Activity Index (CFNAI) rose during October to -0.13 from -0.20 in September, which was little-revised. The three-month moving average fell to -0.27, its lowest level since June. The figures have been negative for most of this year. During the last ten years there has been an 83% correlation between the Chicago Fed Index and the q/q change in real GDP.

Improvement in the Production & Income component led the index higher while Sales, Orders & Inventories ticked up. The Employment, Unemployment & Hours Series fell hard while Personal Consumption & Housing reversed most of its September rise. Forty-six of the 85 individual indicators made positive contributions to the index in October, while 39 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. 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.

Swimming Upstream: Monetary Policy Following the Financial Crisis from the Federal Reserve Bank of San Francisco can be found here.

Chicago Federal Reserve Bank Oct Sep Aug Oct'10 2010 2009 2008
CFNAI -0.13 -0.20 -0.49 -0.35 -0.02 -1.63 -1.94
 3-Month Moving Average -0.27 -0.16 -0.23 -0.36 -- -- --
  Personal Consumption & Housing -0.32 -0.28 -0.37 -0.33 -0.34 -0.38 -0.26
  Employment, Unemployment & Hours 0.03 0.14 -0.07 0.02 0.03 -0.81 -0.67
  Production & Income 0.15 -0.05 -0.08 -0.01 0.22 -0.27 -0.70
  Sales, Orders & Inventories 0.01 -0.01 0.03 -0.03 0.07 -0.16 -0.31
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