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Economy in Brief

Chicago Fed National Activity Index Weakens
by Tom Moeller  September 22, 2014

The Chicago Federal Reserve reported that its National Activity Index (CFNAI) for August eased to -0.21 from a downwardly revised 0.26 in July. The latest level was the first negative reading since January. The three-month moving average fell to 0.07, its lowest point in six months. During the last ten years, there has been a 75% correlation between the Chicago Fed Index and the q/q change in real GDP.

Two of the four component series weakened last month. The Production & Income reading reversed its July strength and turned negative for the first time since April. The Employment, Unemployment & Hours figure also moved down to zero, its weakest level since April of last year. Working the other way, the Personal Consumption & Housing series improved to its least negative reading since April. The Sales, Orders & Inventories index rose to the highest point since March. The Chicago Fed reported that during August, a lessened 45 of the 85 individual indicators made positive contributions to the overall index while an increased 40 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 Aug Jul Jun Aug'13 2013 2012 2011
CFNAI -0.21 0.26 0.17 0.22 -0.01 -0.05 -0.07
 3-Month Moving Average 0.07 0.20 0.16 -0.11 -- -- --
  Personal Consumption & Housing -0.12 -0.13 -0.16 -0.17 -0.15 -0.21 -0.29
  Employment, Unemployment & Hours 0.00 0.10 0.24 0.07 0.09 0.10 0.13
  Production & Income -0.17 0.24 0.02 0.28 0.02 0.04 0.05
  Sales, Orders & Inventories 0.08 0.04 0.07 0.04 0.03 -0.01 0.03
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