Chicago Fed: Slower Slow Growth In April… Again
James Picerno | May 21, 2013 12:42AM ET
The US economy slowed in April for the second time in as many months, “led by declines in production-related indicators, according to yesterday’s release of the Chicago Fed National Activity Index , a weighted average of 85 economic data sets. But the deterioration has yet to make a conspicuous dent in the three-month moving average (CFNAI-MA3), which remained virtually unchanged at -0.04 last month vs. a revised -0.05 for March. The three-month average offers "a more consistent picture of national economic growth," the Chicago Fed advises. By that standard, the US economy is still expanding at a pace that’s only slightly below its historical trend as of last month.
Based on the guidelines published for this index, yesterday’s update also shows that recession risk was low in April. A CFNAI-MA3 value below -0.70 after a period of economic expansion "indicates an increasing likelihood that a recession has begun," according to the Chicago Fed. By that measure, last month remained convincingly in the growth camp. A similar analysis was dispatched in last week’s update of The Capital Spectator Economic Trend & Momentum indices.
For the moment, the expansion stumbles on, although It’s been clear for weeks that the manufacturing sector has wavered recently and that the blowback. It’s still unclear if these headwinds will persist. If they do, the question is whether the broader economy is headed for darker days in the near term? That’s an open debate, as always, but for now it appears that the economy remains on a path of modest growth, albeit at a reduced pace vs. the first quarter.
The next round of updates may tell us if the malaise is spreading and deepening, starting with today’s report on existing home sales, followed by Thursday’s releases: weekly jobless claims and an early look at the trend in May via the flash estimate of the Markit PMI manufacturing index.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.