Chicago Fed National Activity Index Rebounds in November
Summary
- November CFNAI recovers to 0.03, a four-month high.
- All four key components rebound m/m, w/ two making positive contributions.
- CFNAI-MA3 improves to -0.20, still negative but above -0.70 that historically has been associated with recession.
The Chicago Fed National Activity Index (CFNAI) rose to a positive 0.03 in November, up from -0.66 in October (-0.49 initially) and 0.02 in September (-0.02 previously), according to the Federal Reserve Bank of Chicago, indicating U.S. economic growth increased for the month. The November reading was the second m/m rise in three months to the highest level since July; it was also up from -0.54 in November 2022. The latest CFNAI was constructed using data available as of December 21, 2023. At that time, data for 51 of the 85 indicators were available. For all missing data, estimates were used in constructing the index.
The index's three-month moving average (CFNAI-MA3), which smooths out the m/m volatility in the index, rebounded to -0.20 in November, the sixth m/m increase in seven months, from -0.26 in October (-0.22 initially); it was marginally down from -0.19 in November 2022. The CFNAI-MA3 is expressed in standard deviation units from zero (with a value of zero defined as trend real GDP growth). Research at the Chicago Fed indicates that an average reading of -0.70 or below is consistent with the economy being in a recession. Therefore, the November reading did not suggest that the U.S. economy is currently in a recession.
The monthly figures in November reflected a rebound in all four of the CFNAI component series, with two categories making positive contributions. The Personal Consumption & Housing index rebounded to a positive 0.04 in November, the highest reading since January 2023, from -0.03 in October; it was an improvement from -0.10 in November 2022. The Employment, Unemployment & Hours index recovered to a positive 0.03 in November, the highest level since April, from -0.15 in October; it was slightly up from -0.01 in November last year. The Production & Income index rose to 0.00 in November, the highest level since July, after falling to -0.37 in October; it was up from -0.24 in November 2022. The Sales, Orders & Inventories index increased to -0.03 in November after declining to -0.11 in October; it was up from -0.19 in November last year.
The CFNAI Diffusion Index, which measures the breadth of change in the component series and is also a three-month moving average, improved to -0.21 in November after falling to -0.35 in October (-0.20 initially). A reading of zero indicates that all of the indicators are growing at their long-term average. The November reading was the second m/m increase in three months but below -0.07 in November 2022. According to the Chicago Fed, 43 of the 85 individual indicators contributed positively to the November CFNAI, while 41 contributed negatively and one made a neutral contribution. Sixty-two indicators improved from October to November, while 21 indicators deteriorated and two were unchanged; of the indicators that improved, 23 made negative contributions.
The CFNAI is a weighted average of 85 monthly indicators of national economic activity. It is constructed to have an average value of zero and a standard deviation of one. Since economic activity moves toward trend growth rate over time, a positive index reading corresponds to growth above trend and a negative index reading corresponds to growth below trend.
The index is constructed by the Federal Reserve Bank of Chicago. These figures are available in Haver's SURVEYS database.
Winnie Tapasanun
AuthorMore in Author Profile »Winnie Tapasanun has been working for Haver Analytics since 2013. She has 20+ years of working in the financial services industry. As Vice President and Economic Analyst at Globicus International, Inc., a New York-based company specializing in macroeconomics and financial markets, Winnie oversaw the company’s business operations, managed financial and economic data, and wrote daily reports on macroeconomics and financial markets. Prior to working at Globicus, she was Investment Promotion Officer at the New York Office of the Thailand Board of Investment (BOI) where she wrote monthly reports on the U.S. economic outlook, wrote reports on the outlook of key U.S. industries, and assisted investors on doing business and investment in Thailand. Prior to joining the BOI, she was Adjunct Professor teaching International Political Economy/International Relations at the City College of New York. Prior to her teaching experience at the CCNY, Winnie successfully completed internships at the United Nations. Winnie holds an MA Degree from Long Island University, New York. She also did graduate studies at Columbia University in the City of New York and doctoral requirements at the Graduate Center of the City University of New York. Her areas of specialization are international political economy, macroeconomics, financial markets, political economy, international relations, and business development/business strategy. Her regional specialization includes, but not limited to, Southeast Asia and East Asia. Winnie is bilingual in English and Thai with competency in French. She loves to travel (~30 countries) to better understand each country’s unique economy, fascinating culture and people as well as the global economy as a whole.
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