Chicago Fed National Activity Index Is Negative in February
by:Tom Moeller
|in:Economy in Brief
Summary
- Reading is below zero for fourth month in last five.
- All four components are negative.
- Recent trend roughly stabilizes.
The Chicago Fed National Activity Index (CFNAI) fell to -0.19 during February from an unrevised +0.23 in January, according to the Federal Reserve Bank of Chicago. The figure was improved from its most negative reading a -0.62 in November. An unchanged index had been expected in the Informa Global Markets Survey.
The index's three-month moving average, which smooths out volatility, edged up to -0.13 last month from -0.27 in January. The reading was higher than a low of -0.38 in December. During the last 10 years, there has been a 71% correlation between the change in the Chicago Fed Index and quarterly growth in real GDP.
The Production & Income index fell to -0.08 in February from +0.15 in January. It compared to -0.66 in December. The Employment, Unemployment & Hours index declined to -0.02 from +0.10 in January. The Personal Consumption & Housing index weakened to -0.08 from +0.10 in January, which was a 12-month high. The Sales, Orders & Inventories index of -0.02 compared to -0.12 in January and was the sixth straight negative reading.
The CFNAI diffusion index, which measures the breadth of movement in the component series, improved to 0.02 in February from -0.07 in January. It was the first positive figure in four months. Thirty-eight of the 85 component series contributed positively to the index while 47 made negative contributions to the index overall.
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 moves 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 February 21, 2023. January data for 51 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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