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Economy in Brief

Chicago Fed National Activity Index Indicates Growth Slowdown
by Tom Moeller  March 21, 2016

The National Activity Index from the Federal Reserve Bank of Chicago fell to -0.29 during February. It followed a positive 0.41 in January which had been the first positive reading since July. The three-month moving average remained in negative territory. During the last ten years, there has been a 77% correlation between the Chicago Fed Index and the q/q change in real GDP.

Each of the component series weakened versus January. The Production & Income reading deteriorated to -0.21 after being positive for one month. Employment, Unemployment & Hours fell sharply m/m, but remained positive. Sales, Orders & Inventories remained negative for the sixth month in the last seven. The Personal Consumption & Housing figure fell m/m to -0.09, its weakest reading since October. The Fed reported that 27 of the 85 component series made positive contributions to the total while 58 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.

Chicago Federal Reserve Bank Feb Jan Dec Feb '15 2015 2014 2013
National Activity Index (percent) -0.29 0.41 -0.31 -0.40 -0.14 0.21 -0.05
 3-Month Moving Average -0.07 -0.12 -0.30 -0.13 -- -- --
  Personal Consumption & Housing -0.09 -0.05 -0.06 -0.22 -0.09 -0.11 -0.15
  Employment, Unemployment & Hours 0.03 0.19 0.11 0.13 0.08 0.18 0.10
  Production & Income -0.21 0.29 -0.33 -0.22 -0.12 0.11 -0.02
  Sales, Orders & Inventories -0.03 -0.02 -0.03 -0.09 -0.01 0.04 0.02
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