NEW YORK - The Chicago Fed National Activity Index for November improved dramatically, rising to negative 0.32 from a revised negative 1.02 reading in October, originally reported as negative 1.08.
Meanwhile, the three-month moving average (CFNAI-MA3) improved to negative 0.77 in November, from October’s revised negative 0.87 reading, initially reported as negative 0.91, the Federal Reserve Bank of Chicago reported today.
In November 2008, the index was negative 2.99, while the CFNAI-MA3 was negative 2.63 in that month.
The negative 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. However, CFNAI-MA3 “remained in a range that has historically been consistent with the early stages of a recovery following a recession,” the Chicago Fed said.
The production and income category of indicators contributed positive 0.35 to the index (compared to a contribution of negative 0.09 in the previous month), while employment-related indicators contributed negative 0.12 after providing a negative 0.42 in October, the Fed said.
Consumption and housing-related data contributed negative 0.48 in the month, after contributing negative 0.49 the prior month, while sales, orders and inventories contributed negative 0.07, after a negative 0.02 contribution in October.
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, 36 of the 85 indicators made positive contributions to the index in the month and 49 made negative contributions. While 53 indicators were better than the previous month, 27 of these still made negative contributions to the index. Also, 32 indicators deteriorated from October to November.
The index was constructed using data available by Dec. 17, with data for 52 of the 85 indicators having been published by then. The Fed said it used estimates for the missing data.
