Chicago Fed National Activity Index Drops To -0.45, Lowest Since August 2010, Economy Enters "Below-Average" Growth

Another diffusion contraction confirms the stagflation thesis is playing out just as expected. "Led by declines in production-related indicators, the Chicago Fed National Activity Index fell to –0.45 in April from +0.32 in March. April marked the lowest reading of the index since August 2010. Three of the four broad categories of indicators that make up the index deteriorated from March, but two of those three categories made positive contributions to the index in April." And more truthiness courtesy of a tumbling Japanese economy and European contraction: "The index’s three-month moving average, CFNAI-MA3, declined to –0.12 in April from +0.08 in March, turning negative for the first time since December 2010. April’s CFNAI-MA3 suggests that growth in national economic activity was somewhat below its historical trend. With regard to inflation, the CFNAI-MA3 suggests subdued inflationary pressure from economic activity over the coming year." And the admission: "Parts shortages that resulted from the earthquakes in Japan contributed to a decline in motor vehicle and parts production." But no, GM and Ford are both not seeing any impact from Japan...

And for those wondering: "A zero value for the index indicates that the national economy is expanding at its historical trend rate of growth; negativevalues indicate below-average growth; and positive values indicate above-average growth." And: "When the CFNAI-MA3 value moves below –0.70 following a period of economic expansion, there is an increasing likelihood that a recession has begun." We are almost there.

Full report.

Comments

[Robslob]

The "market" is beginning to speak through all the manipulation and it is saying "Help Me Ben!"

[topcallingtroll]

still hanging out in good old USA cash.

Lonely and scared as usual, but a few people are coming over to my side.

[oh_bama]

Well this number is

UPWARD REVISSD!!

from 0.26 to 0.32

Just FYI.

[rocker]

Contraction equals Great Recession II.     High gas prices and always cause recessions.

Maybe they should have raised margins on Oil instead of Silver. Oil Margins increased by 30%. Silver 230%.  TPTB. 

[blindfaith]

folks it is not always oil and gas...too many diluted dollars dumped into metal speculation not production.

You have two ends of a pipe, if what is in the middle can fetch only 1.00 finished, and you have to pay 1.045 for it as raw material, you ain't never gona make a profit...even on volume!  You simply stop manufacturing.  And, everyone wonders why jobs are not being created...PLEASE, we are why jobs are not being created every time a furutes contract is pushed up.

[SheepDog-One]

Using the rest of my 'USA fiat cash money' to buy more ammo and food. 

[Imminent Collapse]

Better buy you some friends while you are at it.

[Manthong]

Maybe the market participants are saying either "I don't have to play anymore", " I can't play anymore" or "I don't want to play anymore".

[hugovanderbubble]

Market data completly irrrelevant cos no money more than Algos...

Sell off till 26th may, then Big July Sell Program once Derivatives Expiration.

[plocequ1]

Shhh, Dont tell analysts this. They wouldn't have a job promoting their photoshop exhibits ( Charts ) and failed theories ( Hindenberg omen ). It keeps them busy .

[Caviar Emptor]

When you strip out pure Fed-induced inflation, there's very little for the economy to show for all the herculean bailouts, "rescues" and double-dealing

[hugovanderbubble]

+1

[SheepDog-One]

Underlying it all is data which shows the greatest depression. All theyve got is their fake flash money rolls.

[RockyRacoon]

When you strip out pure Fed-induced inflation, there's very little for the economy to show for all the herculean bailouts, "rescues" and double-dealing.

Since when has any of this been about the general economy?   When did it change from keeping bankers' heads above water?

[oogs66]

weather

[topcallingtroll]

Actually in a moment of honesty it was admitted by those who supported all the bailouts that it would merely slow down the pain and extend it over years rather than solve anything. 

Here we go for the second round of adjustment..  Well, actually the adjustment period never ended.

[oh_bama]

Well this number is

UPWARD REVISSD!!

from 0.26 to 0.32

Just FYI.

[firstdivision]

So basically we will have QE3 announced in about 1 month.  So there will be no transitionary QE2.5 then QE3.  Nice job Ben, let's keep the bad debt going so that these predictable cycles continue.  Had we let the bad debt be restructured/defaulted on back in 2009, I'm sure our economy would be on its way back to a sure fire sustainable recovery by now.  Oh well.  Candy stripe a cancer ward.

[OT]My Captcha question for this one, "33 plus 36".  Captcha FTW for once![/OT]

[Urban Roman]

I have a new word for economists to learn:

Shrinkage

[Quinvarius]

I guess we are going through a Costanza cycle.  We have to explain to everyone how huge our economy really is when it is warm out.  Because all the world sees now is a shrinky dink.

[SheepDog-One]

The volume (not liquidity) churning robots frantically whip faster trying to find something to pull themselves higher, while the maniacal monetizers say 'Dont worry, we got this, more imaginary decimal points is the answer'.

[baby_BLYTHE]

We're going into a recession. Buckle up folks!

[huckman]

Pretty interesting:

http://www.youtube.com/watch?v=sX7M3w02Bfw&feature=player_embedded