Chicago Fed National Activity Index Rises to a Positive Level in December
Summary
- CFNAI +0.15 in December, the first positive reading since May ’24.
- Two of four CFNAI components increase m/m and two make positive contributions.
- CFNAI-MA3 improves to -0.13, a 5-month high; still negative but well above -0.70 (recession signal).
The Chicago Fed National Activity Index (CFNAI) rose to +0.15 in December, up from -0.01 in November (-0.12 initially) and -0.54 in October (-0.50 previously), today’s report from the Federal Reserve Bank of Chicago showed, indicating U.S. economic growth increased for the month. The December reading, following m/m declines in October and September, was the second successive m/m rise and the highest level since May 2024 (+0.15); it was down from a high of +0.39 in February 2024 but up from -0.11 in December 2023.
The index's three-month moving average (CFNAI-MA3), which smooths out the m/m volatility in the index, increased to -0.13 in December, the highest reading since July 2024, from -0.26 in November (-0.31 initially); it was slightly up from -0.17 in December 2023. 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. Thus, the December reading suggests that the U.S. economy is not currently in a recession.
The December positive reading reflected two positive contributions in the four CFNAI key components. The Production & Income index contributed +0.19 in December, the highest reading since February 2024, up from +0.03 in November; it was also up from -0.14 in December 2023 and a low of -0.59 in December 2022. The Employment, Unemployment & Hours index contributed +0.01 in December and November, the highest reading since May 2024; it was an improvement from -0.04 in December 2023. The contribution of the Sales, Orders & Inventories index to the CFNAI increased to -0.02 in December from -0.05 in November; however, it was down from +0.02 in December 2023. The contribution of the Personal Consumption & Housing index to the CFNAI dipped to -0.02 in December, the lowest reading since August, after registering at -0.01 in November and October; it was down from +0.06 in December 2023.
The CFNAI Diffusion Index, which measures the breadth of change in the component series and is also a three-month moving average, improved to -0.15 in December, the highest reading since July 2024, from -0.28 in November (-0.31 initially). A reading of zero indicates that all of the indicators are growing at their long-term average. The December reading, while up from a low of -0.27 in October 2023, was marginally down from -0.14 in December 2023 and well below a high of +0.26 in September 2022.
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 tends 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.
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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