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Economy in Brief

Chicago Fed National Activity Index Declines
by Tom Moeller  August 27, 2018

The Federal Reserve Bank of Chicago reported that its National Activity index fell to 0.13 during July from 0.48 in June. The decline came after two months of great variability. The three-month moving average fell to 0.05, its lowest level since September of last year. During the last ten years, there has been a 77% correlation between the Chicago Fed Index and the q/q change in real GDP.

Performance amongst the component series was mostly negative during July. The Production & Income reading fell to 0.05 following two months of heightened variability caused by changing utility output. The Sales, Orders & Inventories figure slipped to 0.03 and has been fairly weak for several months. The Personal Consumption & Housing indicator eased to -0.07 and was down sharply versus its recent high during March. The Employment, Unemployment & Hours figure rose modestly to 0.12. after two months of decline.

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 Jul Jun May Jul '17 2017 2016 2015
National Activity Index (percent) 0.13 0.48 -0.46 -0.18 0.13 -0.12 -0.26
 3-Month Moving Average 0.05 0.20 0.12 -0.07 -- -- --
  Production & Income 0.05 0.45 -0.63 -0.16 0.05 -0.07 -0.21
  Employment, Unemployment & Hours 0.12 0.03 0.13 0.03 0.09 0.02 0.07
  Personal Consumption & Housing -0.07 -0.06 0.00 -0.07 -0.05 -0.07 -0.08
  Sales, Orders & Inventories 0.03 0.06 0.03 0.02 0.05 -0.00 -0.04
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