US: Chicago Fed National Activity Index


Mon Jun 22 07:30:00 CDT 2015

Actual Previous Revised
Level -0.17 -0.15 -0.19
3 Month Moving Average -0.16 -0.23 -0.20

Highlights
There was net improvement in May's run of economic data but not much at least based on the national activity index which comes in at minus 0.17 vs a downward revised minus 0.19 in April. The 3-month average is telling the same story of weakness, at minus 0.16 vs a revised minus 0.20 in April.

Much stronger payroll growth, at 280,000, was May's highlight but the gain was offset by a 1 tenth tick higher in the unemployment rate to 5.5 percent which leaves the month's total employment contribution to the index unchanged at plus 0.10. Other readings were also little changed and all soft: production-related indicators at minus 0.17 vs April's minus 0.19, sales/orders/inventories at zero vs minus 0.1, and personal consumption & housing at minus 0.09.

The big bounce, according to today's report, that was expected following the transitory factors of a very soft first quarter has yet to appear.

Definition
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.


Description
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.