National Activity Index's 3 Mo Moving Avg Declines For 1st Time in 09
The Chicago Fed's National Activity Index, or NAI, "is a weighted average of 85 existing monthly indicators of national economic activity. It is constructed to have an average value of zero and a standard deviation of one. Since economic activity tends toward trend growth rate over time, a positive index reading corresponds to growth above trend and a negative index reading corresponds to growth below trend."
Over the years it has been in existence, the first month or few the NAI-MA3 (3 Month Moving Average) moves above -0.7 after a period of recession, the NAI-MA3 move above -0.7 has generally coincided with the first month of a new expansion (and end of previous recession) as defined by the NBER.
Never before over the 40+ year history of the CFNAI-MA3 has that index fallen back below -0.7 so shortly after the official end of a recession, and especially given that it barely even poppped above -0.7 to begin with, leads at least this blogger to speculate that GDP may have gone negative in October, at least for that one month, and that if for any reason this and/or the first quarter of 2010 is/are negative, the NBER may easily be inclined to conclude that the national recession actually never ended over this past summer.
November and December "should" look brighter, with holiday sales already exceeding extremely low expectations. A considerably brighter November and December would drastically lessen the odds that the US is still in recession. Virtually all other indicators suggest that the national recession did in fact end over summer, but with one very big caveat: Indicators are sometimes if not often significantly revised up or down as more information becomes available.
Latest CFNAI News Release
Economic activity leveled off in October
The Chicago Fed National Activity Index was −1.08 in October, down very slightly from −1.01 in September. A decline in the contribution of production and income indicators offset small improvements in the other three broad categories of indicators that make up the index. (PDF,124KB)
Over the years it has been in existence, the first month or few the NAI-MA3 (3 Month Moving Average) moves above -0.7 after a period of recession, the NAI-MA3 move above -0.7 has generally coincided with the first month of a new expansion (and end of previous recession) as defined by the NBER.
Never before over the 40+ year history of the CFNAI-MA3 has that index fallen back below -0.7 so shortly after the official end of a recession, and especially given that it barely even poppped above -0.7 to begin with, leads at least this blogger to speculate that GDP may have gone negative in October, at least for that one month, and that if for any reason this and/or the first quarter of 2010 is/are negative, the NBER may easily be inclined to conclude that the national recession actually never ended over this past summer.
November and December "should" look brighter, with holiday sales already exceeding extremely low expectations. A considerably brighter November and December would drastically lessen the odds that the US is still in recession. Virtually all other indicators suggest that the national recession did in fact end over summer, but with one very big caveat: Indicators are sometimes if not often significantly revised up or down as more information becomes available.
Latest CFNAI News Release
Economic activity leveled off in October
The Chicago Fed National Activity Index was −1.08 in October, down very slightly from −1.01 in September. A decline in the contribution of production and income indicators offset small improvements in the other three broad categories of indicators that make up the index. (PDF,124KB)