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Economy in Brief

Chicago Fed National Activity Index Declines in February
by Tom Moeller  March 22, 2021

• Severe winter weather likely curtailed activity. 

• Production & income and personal spending & housing fall.

The Federal Reserve Bank of Chicago's National Activity Index fell to -1.09 during February from 0.75 in January, revised from 0.66. The index had been positive since May of last year.

The three-month moving average, which smoothes out the m/m volatility in the index, fell last month to -0.02 from 0.46 in January. It was the weakest reading since June of last year. During the last 20 years, there has been a 92% correlation between the Chicago Fed Index and quarterly growth in real GDP.

A decline in the Production & Income component led the weakness in the total, falling to -0.85 from 0.37 in January. The Personal Consumption & Housing series declined to -0.29 from 0.27 in January. It was the fourth negative reading in five months. The Sales, Orders & Inventories series slipped to 0.03 from 0.05, remaining well below the high of 0.20 averaged in the third quarter of last year. The Employment, Unemployment & Income series eased to 0.02, its lowest level since April of last year. The CFNAI diffusion index, which measures the breadth of movement in the components, declined to 0.17 as 51 of the 85 component series contributed negatively and 34 made positive contributions to the index overall.

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 Feb Jan Dec Feb'20 2020 2019 2018
Chicago Fed National Activity Index (+ = Growth Above Trend) -1.09 0.75 0.28 0.02 -0.49 -0.14 0.11
   Production & Income -0.85 0.37 0.33 0.00 -0.14 -0.10 0.06
   Employment, Unemployment & Hours 0.02 0.04 0.02 0.05 -0.31 0.00 0.08
   Personal Consumption & Housing -0.29 0.27 -0.08 -0.03 -0.04 -0.02 -0.04
   Sales, Orders & Inventories 0.03 0.06 0.02 0.01 -0.01 -0.03 0.01
CFNAI 3-Month Moving Average -0.02 0.46 0.55 -0.10 -- -- --
CFNAI Diffusion Index 0.17 0.34 0.45 -0.12 0.19 -0.13 0.17
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