REGIONAL ⏐ ECONOMICS ⏐ APPLICATIONS ⏐ LABORATORY
CHICAGO BUSINESS ACTIVITY INDEX
CBAI increased in October
The Chicago Business Activity Index (CBAI) was 70.3 in October, up significantly from 58.6 in September.
Even though October’s index remains still well below its historical trend, the recent movement of the index
implies that the region’s economic activity is continuing to improve.
In October the national and regional economy presented generally bright features. The Federal
Reserve Board’s industrial production index increased 0.1 percent in October; and retail sales (excluding food
services) increased 1.3 percent in October after having dropped 2.2 percent in September. The Chicago Fed
Midwest Manufacturing Index (CFMMI) continued to increase in October, increasing 0.5 percent after
registering an increase of 0.7 percent in September. Meanwhile, The Chicago Fed National Activity Index
(CFNAI) was –1.08 in October, down very slightly from –1.01 in September. In the Chicago region,
manufacturing and non-manufacturing employment decreased 0.3 percent and 0.1 percent respectively in
October while construction employment leveled off.
The downside risk to economic growth has been mitigated substantially by the proactive fiscal and
monetary policy initiatives. In particular, the recent national employment situation exhibits a favorable sign
that the labor market is recovering gradually from the abrupt deterioration since the beginning of the recession.
The unemployment rate decreased to 10.0 percent in November from 10.2 percent in October. Also,
declining trend of nonfarm payroll employment has been subdued by degrees: 1Q -2,074,000 → 2Q 1,285,000 → 3Q -597,000 → October -111,000 → November -11,000. For the local economy, considering
recent national economic conditions, the Chicago economy is expected to continue on an improving trend in
the near future. However, the CBAI still continues to be far below the long-term trend, suggesting that it
would take considerable time to gain the momentum of economic expansion.
Chicago Business Activity Index
Release Date:
December 16, 2009
150
Next Release Date:
January 15, 2010
140
130
above
trend
120
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110
100
01/02
trend
01/03
01/04
01/05
01/06
01/07
01/08
01/09
01/10
90
80
CBAI (Current: 70.3)
70
60
1 month 3 month 1 year
50
Historical (ago)
58.6
48.0
50.0
Forecast (ahead)
79.3
72.4
76.1
40
30
20
below
trend
Chicago Business Activity Index
Chicago Fed National Activity Index (CFNAI-MA3)
Chicago & National Retail Sales
1.2
11500
0.8
0.4
10500
0.0
01/02
01/03
01/04
01/05
01/06
01/07
01/08
01/09
-0.4
9500
-0.8
-1.2
8500
-1.6
-2.0
7500
-2.4
-2.8
6500
-3.2
-3.6
5500
01/02
-4.0
Chicago & National Manufacturing Employment
01/03
01/04
01/05
01/06
01/07
01/08
01/09
Illinois & National Construction
540
3000
520
500
2500
480
2000
460
440
1500
420
1000
400
380
01/02
01/03
01/04
01/05
01/06
01/07
01/08
01/09
Chicago & National Non-manufacturing Employment
500
01/02
01/03
01/04
01/05
01/06
01/07
01/08
01/09
* Black lines show Chicago indicators.
National indicators are rescaled for comparison.
4200
Economic Activity: Summary
4100
Percentage change compared to the previous period
4000
National
3900
Chicago
Months
ago
12
Mfgn
-11.47
-1.24
-0.43
-9.22
-1.04
-0.31
NMfgn
-3.11
-0.21
-0.05
-3.99
-0.58
-0.14
Cons
-15.27
-2.84
-0.93
-13.17
-1.04
0.01
Retail
-2.34
1.75
1.28
-5.34
-0.06
0.83
3
1
12
3
1
3800
3700
3600
3500
01/02
01/03
01/04
01/05
01/06
01/07
01/08
01/09
Note: All series are seasonally adjusted.
The Chicago Business Activity Index (CBAI) is a monthly statistic that measures the changes in the business cycle
status of the six-county Chicago region. The CBAI leads the local business cycle by three-to-four months. REAL’s
approach to constructing this index, using the principal components regression method, directs attention to the
relationship between local and national business cycle.
REGIONAL ⏐ ECONOMICS ⏐ APPLICATIONS ⏐ LABORATORY
For more information please contact:
Tae-Jeong Kim, Research Assistant
T. 217/244-7226; tkim35@illinois.edu
University of Illinois
220 Davenport Hall, 607 S. Mathews Ave.
Urbana, IL 61801-3671, www.real.illinois.edu