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Economy in Brief

Chicago Fed National Activity Index Improves
by Tom Moeller  October 24, 2016

The National Activity Index from the Federal Reserve Bank of Chicago increased to -0.14 during September from -0.72 in August, revised from -0.55. The three-month moving average deteriorated to -0.21, and remained in the narrow band maintained since early last year. During the last ten years, there has been a 76% correlation between the Chicago Fed Index and the q/q change in real GDP.

Each of the index components increased last month. The Production & Income reading rebounded to -0.01 and made up most of the prior month's decline. The Employment, Unemployment & Hours figure also rose to -0.03, but remained well below the January high. The Sales, Orders & Inventories figure gained to -0.01, remaining in negative territory where it's been for most of the past year. The Personal Consumption & Housing reading rose modestly to -0.09, but remained below the April high of -0.02. The Fed reported that 41 of the component series made positive contributions to the total while 44 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.

U.S. Productivity Growth Flowing Downstream from the Federal Reserve Bank of Dallas is available here.

Chicago Federal Reserve Bank Sep Aug Jul Sep '15 2015 2014 2013
National Activity Index (percent) -0.14 -0.72 0.23 -0.22 -0.17 0.16 -0.08
 3-Month Moving Average -0.21 -0.14 -0.10 -0.07 -- -- --
  Personal Consumption & Housing -0.09 -0.12 -0.05 -0.06 -0.08 -0.11 -0.15
  Employment, Unemployment & Hours -0.03 -0.15 0.13 -0.06 0.07 0.18 0.09
  Production & Income -0.01 -0.39 0.15 -0.24 -0.14 0.06 -0.04
  Sales, Orders & Inventories -0.01 -0.06 0.00 0.15 -0.02 0.04 0.02
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