Economy
December 23, 2015
The Chicago Federal Reserve National Activity Index and Steel Supply
Written by Peter Wright
The following is the Chicago Federal Reserve statement followed by our own graphical analysis. The CFNAI is an excellent reality check for much of the economic analysis that we routinely provide in The Steel Market Update and is also a reasonably good predictor of the direction of steel demand with a six to nine month lead. For example by the time the steel market went off the cliff in September 2008, the CFNAI had been signaling an increasingly severe problem for eight months. Then in the first Q of 2009 the CFNAI was recovering as steel supply was still going south. An explanation of the Index is provided at the end of this piece.
The official statement reads as follows:
