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Economy in Brief

Chicago Fed National Activity Index Deteriorates
by Tom Moeller  June 23, 2016

The National Activity Index from the Federal Reserve Bank of Chicago declined to -0.51 during May, following one month in positive territory. It suggested below-trend overall economic growth. The three month moving average reinforced this notion by being in negative territory since February 2015. 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 declined last month. The Production & Income reading fell sharply to -0.32, its lowest point in six months. The Personal Consumption & Housing figure declined to -0.09. The Employment, Unemployment & Hours figure also fell to -0.09, the weakest reading in nine months. The Sales, Orders & Inventories figure was fairly steady at -0.01. The Fed reported that 28 of the 85 component series made positive contributions to the total while 57 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 May Apr Mar May '15 2015 2014 2013
National Activity Index (percent) -0.51 0.05 -0.64 -0.33 -0.17 0.16 -0.08
 3-Month Moving Average -0.36 -0.25 -0.20 -0.11 -- -- --
  Personal Consumption & Housing -0.09 -0.02 -0.12 -0.05 -0.09 -0.11 -0.15
  Employment, Unemployment & Hours -0.09 -0.06 -0.07 0.03 0.07 0.18 0.09
  Production & Income -0.32 0.13 -0.46 -0.10 -0.14 0.06 -0.04
  Sales, Orders & Inventories -0.01 0.00 0.01 -0.20 -0.02 0.04 0.02
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