Chicago Fed National Activity Index in April Retraces Earlier Improvement
by:Tom Moeller
|in:Economy in Brief
Summary
- Index is lowest since January.
- Component declines are broad-based.
The Chicago Federal Reserve Bank reported that its National Activity Index (CFNAI) declined during April to -0.23 from -0.04 in March. The figure was below the February reading of +0.31 and was the weakest figure since January. The three-month moving average of the index strengthened to +0.01, its highest level since October 2022. It was increased from a low of -0.39 in December 2022. 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 the April index reflected a sharp decline in the Production & Income category to -0.11 from -0.01 and it was the weakest level in three months. The Personal Consumption & Housing component also fell sharply to -0.07 from +0.01, and it too was the weakest reading since January. The Employment, Unemployment & Hours series declined to -0.02 last month from +0.02 in March and has been moving sideways since December. Working the other way, the Sales, Orders and Inventories measure improved to -0.03 from -0.06.
The diffusion index of the CFNAI, which measures the breadth of component change, edged higher to -0.07 in April from -0.08 and remained above the low of -0.33 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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