US: Chicago Fed National Activity Index

Thu May 21 07:30:00 CDT 2015

Consensus Consensus Range Actual Previous Revised
Level 0.10 -0.48 to 0.20 -0.15 -0.42 -0.36
3 Month Moving Average -0.23 -0.27 -0.27

April was not the month that anybody hoped for, failing to show much bounce at all from a very weak March. The national activity index is in the negative column for the month, at minus 0.15 to indicate sub-par economic growth. This is below the Econoday consensus for plus 0.10 and comes despite an easy comparison with a revised minus 0.36 for March.

Production was the weakest component in April signaled all through the month by weakness in regional Fed surveys. Production in this report was unchanged at minus 0.16. Personal consumption & housing, the component where consumer activity is measured, is the 2nd weakest component at minus 0.06. The component for sales/orders/inventories came in at zero with the only plus being employment, at plus 0.08 vs March's minus 0.08.

Was the first-quarter a one-time slowdown hit by special factors or was it simply another quarter of slowing for an economy that's losing momentum? The 3-month average points, at least right now, to the latter, at a deeply negative minus 0.23 and not much better than March's minus 0.27.

Market Consensus Before Announcement
The Chicago Fed activity index will offer a summation of all the economic data during April, a month that was surprisingly slow coming off the even slower months of the first quarter.

The Chicago Fed National Activity Index (CFNAI) is a monthly index designed to better gauge overall economic activity and inflationary pressure. The CFNAI is released at 8:30 a.m. E.T. normally toward the end of each calendar month. The CFNAI is a weighted average of 85 existing 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.

The 85 economic indicators that are included in the CFNAI are drawn from four broad categories of data: production and income; employment, unemployment, and hours; personal consumption and housing; and sales, orders, and inventories. Each of these data series measures some aspect of overall macroeconomic activity. The derived index provides a single, summary measure of a factor common to these national economic data.

This index is unique among regional Federal Reserve Bank indexes in that it is national in scope. Investors are eager to have insight into economic growth and inflation. This index combines 85 diverse and already released indicators from four broad categories -- production and income; employment, unemployment, and hours; personal consumption and housing; and sales, orders, and inventories -- into an overall index to measure economic performance. The index provides another measure with which investors can measure overall growth.