Chicago Fed: Slower Growth In January

CFNAI and Recessions

 

The next chart includes an overlay of GDP, which reinforces the accuracy of the CFNAI as an indicator of coincident economic activity.

CFNAI and GDP

 

Here's a chart of the CFNAI without the MA3 overlay — for the purpose of highlighting the high inter-month volatility. Consider: the index has ranged from a high 2.68 to a low of -5.01 with an average monthly change of 0.62. That's 8% of the entire index range! The latest reading is a month-over-month change of -0.48.

CFNAI Volatility

 

Further underscoring the volatility is the roller-coaster list of CFNAI monthly headlines from 2017 forward.

 

The Long-Term Economic Trend

In the final chart, we've let Excel draw a linear regression through the CFNAI data series. The slope confirms the casual impression of the previous charts that National Activity, as a function of the 85 indicators in the index, has been declining since its inception in the late 1960s, a trend that roughly coincides with the transition from a good-producing to a post-industrial service economy in the information age.

CFNAI Trend

 

For a more detailed perspective on long-term economic trends, see our latest Understanding the CFNAI Components, which we update within a day or so after the CFNAI is released.

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