The Chicago Federal Reserve has been signaling a slowing growth picture. Last week, the Chicago Fed Survey of Business Conditions showed slower growth, and now it is the Chicago Fed National Activity Index (CFNAI) indicating that economic growth was below average in December.

In Friday’s report, the CFNAI moved up to –0.22 in December from –0.36 in November. That November reading was revised to –0.36 from –0.30. While this is a widely researched report using multiple sources of data from around the nation, the reality is that the markets tend to ignore this report for the most part.

The CFNAI also showed that two of the four broad categories of indicators that make up the index increased from November. That being said, three of the four categories made negative contributions to the index in the month of December.

Other data were shown as follows:

• The CFNAI Diffusion Index, a three-month moving average, ticked up slightly to –0.12 in December from –0.13 in November.
• Some 35 of the 85 individual indicators made positive contributions to the CFNAI in December, while 50 made negative contributions.
• Some 51 indicators improved from November to December, while 32 indicators deteriorated and two were unchanged. Of the indicators that improved, 26 made negative contributions.

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The CFNAI was constructed using data available as of January 20, 2016. The CFNAI is described as follows:

The index is a weighted average of 85 indicators of national economic activity drawn from four broad categories of data: 1) production and income; 2) employment, unemployment, and hours; 3) personal consumption and housing; and 4) sales, orders, and inventories. A zero value for the index indicates that the national economy is expanding at its historical trend rate of growth; negative values indicate below-average growth; and positive values indicate above-average growth.

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