US: Chicago Fed National Activity Index

Thu Jan 26 07:30:00 CST 2017

Actual Previous Revised
Level 0.14 -0.27 -0.33
3 Month Moving Average -0.07 -0.14 -0.14

Utility production gave the national activity index a lift in December, to plus 0.14 from a minus 0.33 in November (revised). The production component, boosted by demand for heating, rose to plus 0.20 from November's minus 0.30. Components for sales, orders & inventories as well as for personal consumption & housing and employment are all flat and little changed. Given the skewing effect from utilities, the 3-month average may be a truer reading of actual activity and it is modestly negative at minus 0.07, a reading that points to slightly lower-than-usual economic growth.

The Chicago Fed National Activity Index (CFNAI) is a monthly index that tracks overall economic activity and inflationary pressures. 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 over time, a positive index reading corresponds to growth above trend and a negative index reading corresponds to growth below trend.

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.