x
Your preference has been saved. Remove your saved preference.
You must supply both a username and a password to login.
You must supply a username, password and token to login.
Sign on
Passport secured login icon  
 
Wealth Management
Asset Management
Asset Servicing
Insights & Research
About Northern Trust
Search go
Click to close drop down menu.
 
Click to close drop down menu.
Financial Intermediary
Learn about asset management solutions designed for Retirement Plan Advisors, TAMPs/Outsourcing Providers, Subadvisory Program Sponsors, RIAs/Financial Advisors and Trust Institutions.
Institutional
Learn about asset management solutions including: global index management, active equity and fixed income, target retirement date funds, and manager of manager programs.
Individual
Get answers to your investment challenges with asset management capabilities including alternatives, exchange traded funds, fixed income, mutual funds and tax-advantaged equity.
Click to close drop down menu.
 
Northern Trust Logo
 

Weekly Economic Commentary

 
.
 
 
 
 
 
 
 
 
.
 

Encouraging Data Buried in Otherwise Gloomy Economic News

July 23, 2012

Download PDF Version

The European debt crisis continues to make headline news with Spanish and Italian government bond yields marking new post summit highs. These events have intensified the downside risks of economic growth in the United States in the quarters ahead. Buried in the sea of glum economic headlines, the Chicago Fed National Activity Index (CFNAI) increased to -0.15 in June from -0.48 in May. This index has a reputation of identifying turning points of economic activity in the United States. The 3-month moving average of the CFNAI is a better gauge than the monthly measure. The latest 3-month moving average is -0.2 vs. -0.38 in May. According to the Chicago Fed, readings of the 3-month moving average below -0.7 imply an increasing likelihood that a recession has commenced. By implication, the 3-month moving average of the June CFNAI is a bit of encouraging news because the index is not pointing to worsening economic conditions.


Chart 1 - 07 23 2012


Chart 1 presents the entire history of the index, while Chart 2 focuses on the recent years. The turnaround of the CFNAI in June could be a precursor of improving economic conditions. In June, the production, housing, and consumer related indicators of the overall index rose while that of employment-related indicators were neutral.

 

Chart 2 - 07 23 2012

 

 

 

 

 

 

 

 

 

 

 

.
The opinions expressed herein are those of the author and do not necessarily represent the views of The Northern Trust Company. The Northern Trust Company does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions.
.
 
 
 
 
 
 
 
.