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Economy

Economic Data (USA)

Monday, September 25, 2017

Chicago Fed National Activity Index (CFNAI) for August 2017

The Federal Reserve Bank of Chicago released its National Activity Index (CFNAI) for August 2017:

Predicted: +0.11
Actual (CFNAI): -0.31

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): +0.03
  • 3-Month Moving Average (CFNAI-MA3): -0.04
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Chart: Chicago Fed National Activity Index for August 2017
Chart: Chicago Fed National Activity Index for August 2017

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From Today's Report


"...Index points to slower economic growth in August

Led by declines in production-related indicators, the Chicago Fed National Activity Index (CFNAI) moved down to -0.31 in August from +0.03 in July. Two of the four broad categories of indicators that make up the index decreased from July, and two of the four categories made negative contributions to the index in August. The index’s three-month moving average, CFNAI-MA3, decreased to -0.04 in August from a neutral reading in July.

The CFNAI Diffusion Index, which is also a three-month moving average, was unchanged at -0.01 in August. Thirty-five of the 85 individual indicators made positive contributions to theCFNAI in August, while 50 made negative contributions. Forty-five indicators improved from July to August, while 40 indicators deteriorated. Of the indicators that improved, 14 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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