Chicago Fed National Activity Index Falls in February
by:Tom Moeller
|in:Economy in Brief
Summary
- 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.
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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