Today’s release of the Chicago Federal Reserve National Activity Index (CFNAI) indicated that national economic activity slumped significantly in May with the index declining to -0.63 while the three month moving average fell to -0.05.
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 indicates 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 -0.05 the current three month average index value is indicating very weak growth.