Chicago Fed National Activity Index Dips in June
by:Tom Moeller
|in:Economy in Brief
Summary
- Firming trend remains in place.
- Breadth of component increases improves.
The Chicago Federal Reserve Bank reported that its National Activity Index (CFNAI) declined to 0.05 during June from 0.23 in May, revised from 0.18. The figure was below the February high of +0.30. The three-month moving average of the index strengthened, however, to -0.01 from -0.08, increased from a low of -0.35 in December 2022, suggesting that economic growth is stabilizing. During the last 20 years, there has been a 91% correlation between the three-month index level and the q/q change in real GDP.
The weakening in June index reflected a sharp decline in the Production & Income category to 0.11 from 0.23. It remained up from a January low of -0.49. The Employment, Unemployment & Hours series fell to -0.02 from +0.01. It has been trending sideways for a year. The Sales, Orders and Inventories measure weakened to -0.02 from +0.01. It remained higher than the January low of -0.27. The Personal Consumption & Housing series held steady at -0.02, down from its recent high of +0.03 in December.
The diffusion index of the CFNAI, which measures the breadth of component change, edged higher to -0.08 in June from -0.12 in May and remained above the low of -0.32 registered in October of last year.
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.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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