Chicago Fed National Activity Index Rebounds in February
by:Tom Moeller
|in:Economy in Brief
Summary
- Index recovers January’s decline.
- Three-month average surges.
- Half of components rise.
The Chicago Fed National Activity Index (CFNAI) rose to 0.18 in February from -0.08 in January, revised from -0.03, but stood below a reading of 0.34 in December, revised from 0.18, according to today’s report from the Federal Reserve Bank of Chicago.
The index's three-month moving average jumped to 0.15 last month from 0.07 in January and from -0.06 in December. It was the highest level since April 2022 and increased from a -0.25 low in November of last year. Research at the Chicago Fed indicates that an average reading of -0.70 or below is consistent with the economy being in a recession. The Diffusion Index, which measures the breadth of change in the component series, rose to 0.16 from 0.08 in January. It was increased from a low -0.28 in October.
The February index reflected positive readings in two of the four index components. The Production & Income index contributed 0.19 points to the overall index level after adding 0.02 points in January. It has been trending higher since -0.36 in July of last year. The contribution from the Employment, Unemployment & Hours series declined to 0.02 after surging to 0.08 in January. The contribution from the Personal Consumption & Housing index improved to -0.01 last month after falling sharply to -0.14 in January, which was the lowest reading since February 2021. Finally, the Sales, Orders & Inventories index contributed -0.01 point to the CFNAI in February, up from -0.04 in January.
The Chicago Fed indicated that forty-seven individual indicators made positive contributions to the CFNAI in February, while 38 made negative contributions. Fifty-one indicators improved from January to February, while 34 indicators deteriorated.
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 economic growth 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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