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Economy in Brief
U.S. Housing Starts Drop to 1.446 Mil. in July
Toal housing starts fell 9.6% m/m (-8.1% y/y) to a lower-than-expected 1.446 million...
U.S. Gasoline Prices Decline While the Cost of Crude Oil Rises
Retail gasoline prices fell to $3.94 per gallon (+24.1% y/y) last week...
ZEW Experts Still See Depressed Conditions and Harbor Weak Expectations
the current situation in the eyes of the ZEW experts strengthened in August in the U.S. and the U.K. but...
U.S. Home Builder Index Extends Downward Trend
The NAHB-Wells Fargo Composite Housing Market Index declined 10.9% during August (-34.7% y/y) to 49...
U.S. Empire State Manufacturing Index Plummets in August; Lowest Since May '20
The Empire State Manufacturing Index of General Business Conditions plunged to -31.3 in August...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller October 26, 2020
• Index suggests slower economic growth.
• Component performance is mixed.
Forward economic momentum diminished last month. The Federal Reserve Bank of Chicago's National Activity Index declined during September to 0.27 from 1.11 in August, revised from 0.79. The index level was the lowest of five consecutive readings.
The three-month moving average, which smoothes out the m/m volatility in the index, fell in September to 1.31 from 3.22 in August. During the last 20 years, there has been a 76% correlation between the Chicago Fed Index and quarterly growth in real GDP.
The Sales, Orders & Inventories series eased negligibly. The Employment, Unemployment & Hours showed lessened growth. The Personal Consumption & Housing series improved modestly last month versus August, but remained low. The Production & Income series turned negative following four straight positive readings. The diffusion index, which measures the breadth of movement in the components, decreased to 0.51 from 0.71 as 50 out of the 85 components improved.
The CFNAI is a weighted average of 85 monthly 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.
These figures are available in Haver's SURVEYS database.
Federal Reserve Bank of Chicago | Sep | Aug | Jul | Sep '19 | 2019 | 2018 | 2017 |
---|---|---|---|---|---|---|---|
Chicago Fed National Activity Index (+ = Growth Above Trend) | 0.27 | 1.11 | 2.61 | -0.33 | -0.14 | 0.12 | 0.13 |
Production & Income | -0.24 | 0.31 | 1.40 | -0.26 | -0.10 | 0.07 | 0.06 |
Employment, Unemployment & Hours | 0.35 | 0.71 | 0.67 | 0.03 | 0.01 | 0.08 | 0.06 |
Personal Consumption & Housing | 0.09 | 0.00 | 0.04 | -0.05 | -0.02 | -0.04 | -0.03 |
Sales, Orders & Inventories | 0.07 | 0.10 | 0.50 | -0.04 | -0.03 | 0.01 | 0.04 |
CFNAI 3-Month Moving Average | 1.33 | 3.22 | 4.25 | -0.13 | -- | -- | -- |
CFNAI Diffusion Index | 0.51 | 0.71 | 0.74 | -0.10 | -0.11 | 0.15 | 0.13 |