The Chicago Fed National Activity Index: November 2011

Today’s release of the Chicago Federal Reserve National Activity Index (CFNAI) continued to indicate weakness in national economic trends with the index remaining in contraction territory for a fourth consecutive month at -0.37 while the three month moving average went flat at -0.24.

The CFNAI is a weighted average of 85 indicators of national economic activity collected into four overall categories of “production and income”, “employment, unemployment and income”, “personal consumption and housing” and “sales, orders and inventories”.

The Chicago Fed regards a value of zero for the total index as indicating that the national economy is expanding at its historical trend rate while a negative value indicates below average growth.

A value at or below -0.70 for the three month moving average of the national activity index (CFNAI-MA3) indicates that the national economy has either just entered or continues in recession.

Bull Trip!: GDP Report Q3 2011 (Third Rough Estimate)

Today, the Bureau of Economic Analysis (BEA) released their second "estimate" of the Q3 2011 GDP report showing that the economy continued to expand but at a notably slower pace than originally estimated with real GDP increasing at an annualized rate of just 1.8% from Q2 2011.

On a year-over-year basis real GDP increased 1.46% while the quarter-to-quarter non-annualized percent change was 0.45%.

The latest quarterly results indicate that the most notable source of weakness in the economy came from the change in private inventories component resulting in an overall contribution of -1.35% to GDP while government expenditures with non-defense spending declined 3.8% and state and local spending declined by 1.6%.

Fixed investment purportedly made notable contributions to Q3 GDP with non-residential fixed investment increasing 15.7% from Q2 2011 while residential fixed investment increased 1.3% over the same period.  

Keep in mind that these results are likely very poorly estimated and are sure to be revised notably in following quarters and even years to come.

Extended Unemployment: Initial, Continued and Extended Unemployment Claims December 22 2011

Today’s jobless claims report showed declines to initial unemployment claims and continued unemployment claims as initial claims fell to the lowest level seen since mid-2008.

Seasonally adjusted “initial” unemployment declined 4,000 to 364,000 claims from last week’s revised 368,000 claims while seasonally adjusted “continued” claims declined by 79,000 resulting in an “insured” unemployment rate of 2.8%.

Since the middle of 2008 though, two federal government sponsored “extended” unemployment benefit programs (the “extended benefits” and “EUC 2008” from recent legislation) have been picking up claimants that have fallen off of the traditional unemployment benefits rolls.

Currently there are some 3.50 million people receiving federal “extended” unemployment benefits.

Taken together with the latest 3.53 million people that are currently counted as receiving traditional continued unemployment benefits, there are 7.04 million people on state and federal unemployment rolls.