The Chicago Federal Reserve reported that its National Activity Index (CFNAI) during August collapsed to -0.41 after jumping to 0.51 in July, revised from 0.34. Ironing out this volatility was the three-month moving average which remained fairly stable near break-even, its best level since January. During the last ten years, there has been a 77% correlation between the Chicago Fed Index and the q/q change in real GDP.

The Production & Income component again was responsible for most of the volatility in the overall index. It declined to -0.30, reversing most of July's improvement. The Sales, Orders & Inventory component also eased to its lowest reading in three months and the Employment, Unemployment & Hours index declined to its lowest point since March. The Personal Consumption & Housing series eased slightly to -0.08 from -0.06. The Fed reported that 25 of the 85 component series made positive contributions to the total while 60 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.