NEW YORK - The Chicago Fed National Activity Index for February reversed to negative 0.64 from a revised negative 0.04 reading in January, originally reported as positive 0.02.
Meanwhile, the three-month moving average (CFNAI-MA3) improved to negative 0.39 in February, from January’s revised negative 0.13 reading, initially reported as negative 0.16, the Federal Reserve Bank of Chicago reported today.
In February 2009, the index was negative 2.48, while the CFNAI-MA3 was negative 3.47 in that month.
The below zero reading for the CFNAI-MA3 indicates national economic growth was below its historical trend, and suggests little inflationary pressure from economic activity in the coming year, the Chicago Fed said.
The production indicators contributed negative 0.08 to the index (compared to a contribution of positive 0.41 in the previous month), its first negative contribution in eight months, while employment-related indicators contributed negative 0.16 after providing a negative 0.02 in January, the Fed said.
Consumption and housing-related data contributed negative 0.45 in the month, after contributing negative 0.44 the prior month, while sales, orders and inventories contributed positive 0.05, after a positive 0.02 contribution in January.
The index is a weighted average of 85 indicators of national economic activity, and is constructed to have an average value of zero and a standard deviation of one. A zero value for the index indicates that the national economy is expanding at its historical trend rate of growth; negative values are associated with below-trend growth while positive values indicate above-trend growth.
Overall, 34 of the 85 indicators made positive contributions to the index in the month and 51 made negative contributions. While 40 indicators were better than the previous month, 20 of these still made negative contributions to the index. Also, 45 indicators deteriorated from January to February.
The index was constructed using data available by March 18, with data for 52 of the 85 indicators having been published by then. The Fed said it used estimates for the missing data.
