logo
  Join        Login             Stock Quote

Chicago Fed Nat'l Activity Index: US Economy Ended 2012 With Modest Growth

 January 22, 2013 05:30 PM


The Chicago Fed National Activity Index (CFNAI) slipped marginally to a monthly reading of +0.02 in December from an upwardly revised +0.27 in November, the Chicago Federal Reserve reports. Today's update translates to a three-month moving average (CFNAI-MA3) of -0.11, or comfortably above the -0.70 level that's considered to be the tipping point for the onset of recessions. CFNAI, a weighted average of 85 indicators, is designed as a benchmark of US economic activity broadly defined.

The December reading of the CFNAI-MA3 offers another strong signal for arguing that the US economy ended 2012 in a recession-free state and that modest growth rolls on. That's been the message all along. As I noted earlier this month, business cycle risk is low, based on a broad reading of economic and financial indicators through December. That analysis has only strengthened in the two weeks since I ran the numbers. As more December data has been published, the overall trend has remained positive. Examples include the upbeat news on retail sales,industrial production, and housing starts through last month, followed by today's CFNAI release.

[Related -The Finer Points Of Hedging… Or Not]

[Related -The Sixty Percent Alibaba Play No One Is Talking About]

No one will confuse the macro trend as unusually strong, however. As the CFNAI press release notes, "economic growth moderated in December." The Chicago Fed advises that "December's CFNAI-MA3 suggests that growth in national economic activity was below its historical trend." Nonetheless, the soft trend has been enough to keep the economy out of the cyclical ditch, at least through the December, based on the numbers published to date.

The debate about January and beyond is, of course, wide open. But December's profile, and 2012's as well, shows a clear bias on the side of growth. Yes, data revisions could come back to haunt us. But at the moment, with a broad array of generally positive numbers published through the end of last year, it's reasonable to expect that any negative revisions will be marginal in terms of the broad trend.

iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageThe Sixty Percent Alibaba Play No One Is Talking About

It's official: Chinese e-commerce juggernaut Alibaba (NYSE: BABA) goes down as the biggest U.S. IPO in read on...

article imageThe Finer Points Of Hedging… Or Not

Barry Ritholtz asks the right question—Why hedge?–in the wake of last week’s announcement that California read on...

article imageBulls Leverage Hopeful News to Launch a Tepid Breakout Attempt

Stocks were able to leverage some optimistic news and dovish words from the Fed to take another stab at an read on...

article imageG-20 Minus One Country Plus 900 Bullet Points Equal 2 Percentage Points of Extra Growth?

For investors, the G-20’s super-secret plan to make the world grow faster is more a sideshow than a reason read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.