This morning, the Federal Reserve Bank of Chicago released December 2012 figures for the Chicago Fed National Activity Index (CFNAI), a measure of how the national economy is faring relative to its historical trend rate. Two of the index’s four economic indicator categories decreased, causing the overall CFNAI to fall from +0.27 in November to +0.02 in December.
Illustrated in the following chart, the three-month moving average increased slightly from -0.13 in November to -0.11 in December. (When the CFNAI-MA3 moves above -0.70 following a period of economic contraction, there is an increasing likelihood that a recession has ended; surpassing a level of +0.20 indicates economic activity associated with sustained recovery).
Note: Based on data available as of 1/17/2013. At that time, October data for 49 of the 85 indicators had been published; for all missing data, estimates were used in constructing the index and CFNAI-MA3.
Source: Federal Reserve Bank of Chicago
Of the 85 indicators that contribute to the index (production/income, sales/orders/inventories, employment/unemployment/hours, and personal consumption/housing):
- 36 improved from November to December, while 48 deteriorated and one was unchanged; 41 made positive contributions, while 44 made negative contributions.
- Production-related indicators made a positive contribution of +0.12 to the index, down from +0.49 in November.
- Employment-related indicators made a positive contribution of +0.09 to the index, up from -0.02 in November.
- Personal consumption/housing made a negative contribution of -0.17 to the index; down from -0.14 in November.
- Sales/orders/inventories indicators made a negative contribution of -0.01 to the index, up from -0.06 in November.
The full news release can be found on the Federal Reserve Bank of Chicago website.