News Column

Chicago Fed Index Fell in April

May 20, 2013

Staff Reports --

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The Chicago Fed National Activity Index (CFNAI) dropped from minus 0.23 in March to minus 0.53 in April, according to figures released today. None of the four categories that make up the index increased in April, while three of them decreased. The index remains significantly above recession levels, however.

The CFNAI's three-month moving average inched up to minus 0.04 in April from minus 0.05 the month before, indicating that national economic growth is near its historical trend and that inflation will continue to be subdued for the coming year, according to the Chicago Fed.

The CFNAI diffusion index, which tracks 85 individual indicators, rose from minus 0.04 in March to minus 0.03 in April, with 32 of the indicators making positive contributions in April. Month to month, 44 indicators were up while 41 were down.

The index by category

The CFNAI measures production; employment; sales, orders and inventories; and consumption and housing. The numbers for the contributions from the four individual categories are:

-- Production in April was down significantly at 0.34, from minus 0.04 in March. Industrial production and manufacturing production both decreased.

-- Employment was neutral for the month, down slightly from 0.01 in March. The unemployment rate dropped a bit in April, while nonfarm payroll growth remained the same for the second month in a row.

-- Sales, orders and inventories were minus 0.01, compared to minus 0.04 in March.

-- Consumption and housing were far down at minus 0.17 in April, a slight improvement over minus 0.15 percent in March. Housing starts dropped from 1,021,000 in March to 853,000 in April, but housing permits were up to 1,017,000 from 890,000 month over month.

The Chicago Fed report was compiled using data as of May 17, when April data from 51 of the index's 85 indicators had been published. Estimates were used to fill in the missing data.

An overall reading of zero indicates growth, while a reading of minus 0.7 indicates that the economy has fallen into recession.


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