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Economy in Brief

Chicago Fed National Activity Index Falls in February
by Tom Moeller  March 21, 2022

• Three of four components improve.

• Three-month moving average eases.

The Federal Reserve Bank of Chicago reported that the Chicago Fed National Activity Index (CFNAI) declined to 0.51 during February from 0.59 in January, revised from 0.69. These figures, however, remained above the 0.44 averaged in the fourth quarter of last year.

The index's three-month moving average slipped to 0.35 in February from 0.37 in January. During the last 10 years, there has been 76% correlation between the change in the Chicago Fed Index and quarterly growth in real GDP.

The Employment, Unemployment & Hours component rose to 0.28 in February, a three-month high. The Production & Income index eased to 0.22 from 0.25 in January, but it remained up from -0.14 in December. The Sales, Orders & Inventories reading held steady at 0.04 last month. Working lower was the Personal Consumption & Housing index to -0.04 from 0.21 in January.

The CFNAI diffusion index, which measures the breadth of movement in the component series, rose to 0.32 in February from 0.29, but these readings were below the 0.40 averaged in Q4. Sixty-one of the 85 component series contributed positively to the overall index and 24 contributed negatively.

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. The CFNAI was constructed using data available as of March 17, 2022. February data for 50 of the 85 indicators had been published at that time. For all missing data, estimates were used in constructing the index.

The index is constructed by the Federal Reserve Bank of Chicago. These figures are available in Haver's SURVEYS database.

Restoring Price Stability is the title of today's speech by Fed Chair Jerome H. Powell to the National Association for Business Economics. It is available here.

Federal Reserve Bank of Chicago Feb Jan Dec Feb '21 2021 2020 2019
Chicago Fed National Activity Index (+ = Growth Above Trend) 0.51 0.59 -0.04 -1.60 0.34 -0.48 -0.20
   Production & Income 0.22 0.25 -0.14 -1.18 0.07 -0.13 -0.13
   Employment, Unemployment & Hours 0.28 0.10 0.25 0.22 0.20 -0.31 -0.00
   Personal Consumption & Housing -0.04 0.21 -0.17 -0.22 0.05 -0.03 -0.02
   Sales, Orders & Inventories 0.04 0.04 0.02 -0.43 0.02 0.00 -0.05
CFNAI 3-Month Moving Average 0.35 0.37 0.44 0.00 0.36 -0.52 -0.20
CFNAI Diffusion Index 0.32 0.29 0.44 0.24 0.31 0.19 -0.20
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