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.



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.



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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