The Chicago Federal Reserve is a regional branch of the Federal Reserve system, but it releases a national economic reading called the Chicago Fed National Activity Index. The monthly reading for January was released on Monday, and the index dropped marginally from 0.14 in December to 0.12.

What may stand out about this national report is that December’s gain of 0.14 was revised down from a much stronger preliminary reading of 0.27. Bloomberg had a consensus estimate of 0.20 for January.

The four broad areas measured in the Chicago report — employment; production and income; sales, orders and inventories; and housing and personal consumption — are made up of 85 economic indicators.

Production was −0.01 in January, down from a positive 0.11 in January. Employment factors rose to 0.09 in January from 0.02 in December. The sales and orders component as a whole dropped to 0.07 from 0.09 the prior month. And the personal consumption and housing component went from −0.05 in December to −0.03.

A couple of items may need to be closely considered here. First is that the reading is still quite positive, even if you consider a slight downtick. The second is that we are now at the end of February and the data is mostly a month old. A third potential consideration would be that the economic reporting in January did not include most of the panic selling that took the stock market into correction territory in February.

According to the Chicago Fed National Activity Index report, two of the four broad categories of indicators decreased from December. The other two also made negative contributions to the index in January. The index’s three-month moving average decreased to 0.17 in January from 0.43 in December.

The Chicago Fed National Activity Index is a weighted average of 85 existing monthly indicators of national economic activity that have been constructed to have an average value of zero and a standard deviation of one. A positive index reading corresponds to growth above trend, while a negative index reading corresponds to growth below trend.

While the Chicago Fed National Activity Index is rather inclusive of the broad economy, much of the data within the index is already known by the time the initial and revision reports are made. The index also rarely creates a major move in the markets.

After an hour of trading on Monday, the Dow was up 237 points at 25,547 and the S&P 500 was up almost 17 points at 2,764. The 10-year Treasury yield was down to 2.84%.

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