Look: I am eager to learn stuff I don't know--which requires actively courting and posting smart disagreement.

But as you will understand, I don't like to post things that mischaracterize and are aimed to mislead.

-- Brad Delong

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Thursday, December 22, 2011

Chicago Fed Index Declines

Calculated Risk presents the November Chicago Fed data on their economic activity index.  "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."

The index dropped from -0.11 in October to -0.37 in November - a trivial change, but directionally unfavorable.  Last quarter GDP growth has also been revised down from 2.0 to 1.8%.  If this is recovery, it is very anemic.

Here is the CR graph of the data.  I noted almost two years ago that this index traces a line pretty similar to quarterly GDP growth.  The slopes are a bit different, and the trend lines aren't parallel, but general contours are similar, and the peak/valley timing lines up quite well.  Here is a graph of quarterly growth in real GDP that I posted in May.

So far, this has not been a good century, and there's little reason to believe it's going to get much better any time soon.

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