The Chicago Fed National Activity Index: February 2010
Yesterday鈥檚 release of the indicated that national economic activity slumped significantly in February with all but the "sales, orders and inventories" components showing significant weakness.
The CFNAI is a weighted average of 85 indicators of national economic activity collected into four overall categories of 鈥減roduction and income鈥�, 鈥渆mployment, unemployment and income鈥�, 鈥減ersonal consumption and housing鈥� and 鈥渟ales, orders and inventories鈥�.
The Chicago Fed regards a value of zero for the total index as indicating that the national is expanding at its historical trend rate while a negative value indicate below average growth.
A value at or below -0.70 for the three month moving average of the national activity index (CFNAI-MA3) indicates that the national economy has either just entered or continues in recession.
It鈥檚 important to note that at -0.39 the current three month average index value is indicating very weak growth after several recent months of intermittent recessionary and near recessionary growth.
The "personal consumption and housing" component is continuing to show very weak results and at -.45, is at a level only marginally better than the worst levels seen this cycle.
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