Today’s release of the Chicago Federal Reserve National Activity Index (CFNAI) indicated that national economic activity pulled back slightly in September mostly as a result of a notable decline in the personal consumption and housing component.
The CFNAI is a weighted average of 85 indicators of national economic activity collected into four overall categories of “production and income”, “employment, unemployment and income”, “personal consumption and housing” and “sales, orders and inventories”.
The Chicago Fed regards a value of zero for the total index as indicating that the national economy is expanding at its historical trend rate while a negative value indicate below average growth.
A value at or below -0.70 for the three month moving average of the national activity index (CFNAI-MA3) indicates that the national economy has either just entered or continues in recession.
It’s important to note that at -0.63 the current three month average index value remained just slightly above the official recessionary indicator mark while September’s literal value dropped to -0.81, well below the recessionary mark.
The following charts (click for full-screen interactive zoom-able version) plot the national activity index as well all of its four components.