Economy Watch: Chicago Fed National Activity Index Swings Upward

By D.C. Stribling, Contributing Editor

Source: Chicago Fed National Activity Index (CFNAI), February 2018

Led by improvements in production-related indicators, the Chicago Fed National Activity Index (CFNAI) rose to +0.88 in February, up from +0.02 in January, the central bank reported on Monday. All categories of indicators that make up the index increased from January, and most categories made positive contributions to the index in February. The index’s three-month moving average, known as the CFNAI-MA3, increased to +0.37 in February from +0.16 in January.

The index is an average of 85 indicators of growth in national economic activity in four broad categories of data, according to the Chicago Fed: production and income; employment, unemployment and hours; personal consumption and housing; and sales, orders and inventories.

A zero value for the monthly index has been associated with the national economy expanding at its historical trend (average) rate of growth. A negative number means below-average growth while a positive one means with above-average growth.

The index has been hovering around zero for most of the decade of the 2010s now, after dipping down below -4.0 briefly during the worst of the 2009 slump. The only other time in the last 50 years the index has even been that low was briefly in the mid-1970s, though there were significant troughs in the early ’80s and lesser ones in the early ’90s and early ’00s generally corresponding to recessionary periods.