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Economy

Economic Data (USA)

Monday, May 22, 2017

Chicago Fed National Activity Index (CFNAI) for April 2017

Earlier today, the Federal Reserve Bank of Chicago released its National Activity Index (CFNAI) for April 2017:

Predicted: +0.10
Actual (CFNAI): +0.49

The CFNAI is a weighted average of 85 indicators of growth in national economic activity drawn from four broad categories of data:

  • Production and income;
  • Employment, unemployment, and hours;
  • Personal consumption and housing; and
  • Sales, orders, and inventories.

The "predicted" figure is what economists were expecting, while the yellow-highlighted figure is what was reported.

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  • Previous Month (revised): +0.07
  • 3-Month Moving Average (CFNAI-MA3): +0.23
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Chicago Fed National Activity Index for April 2017
Chart: Chicago Fed National Activity Index for April 2017

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From Today's Report


"...Index points to increased economic growth in April.

Led by improvements in production-related indicators, the Chicago Fed National Activity Index (CFNAI) rose to +0.49 in April from +0.07 in March. Two of the four broad categories of indicators that make up the index increased from March, and only one category made a negative contribution to the index in April. The index’s three-month moving average, CFNAI-MA3, increased to +0.23 in April from a neutral reading in March.

The CFNAI Diffusion Index, which is also a three-month moving average, moved to +0.16 in April from +0.06 in March. Forty-six of the 85 individual indicators made positive contributions to the CFNAI in April, while 39 made negative contributions. Forty indicators improved from March to April, while 44 indicators deteriorated and one was unchanged. Of the indicators that improved, nine made negative contributions..."
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Understanding The CFNAI:

A zero value for the monthly index has been associated with the national economy expanding at its historical trend (average) rate of growth; negative values with below-average growth (in standard deviation units); and positive values with above-average growth.

Periods of economic expansion have historically been associated with values of the CFNAI-MA3 above -0.70 and the CFNAI Diffusion Index above -0.35. Conversely, periods of economic contraction have historically been associated with values of the CFNAI-MA3 below -0.70 and the CFNAI Diffusion Index below -0.35.

An increasing likelihood of a period of sustained increasing inflation has historically been associated with values of the CFNAI-MA3 above +0.70 more than two years into an economic expansion. Similarly, a substantial likelihood of a period of sustained increasing inflation has historically been associated with values of the CFNAI-MA3 above +1.00 more than two years into an economic expansion.

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