“Index shows economic growth increased in February”: This is the headline for today’s release of the Chicago Fed’s National Activity Index, and here are the opening paragraphs from the report:
Led by improvements in production-related indicators, the Chicago Fed National Activity Index (CFNAI) increased to +0.14 in February from –0.45 in January. Three of the four broad categories of indicators that make up the index increased from January, and two of the four categories made positive contributions to the index in February.Â
The index’s three-month moving average, CFNAI-MA3, decreased to –0.18 in February from +0.02 in January, marking its first reading below zero in six months. February’s CFNAI-MA3 suggests that growth in national economic activity was below its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests subdued inflationary pressure from economic activity over the coming year.Â
The CFNAI Diffusion Index decreased to –0.06 in February from +0.03 in January. Fifty-four of the 85 individual indicators made positive contributions to the CFNAI in February, while 31 made negative contributions. Fifty-one indicators improved from January to February, while 33 indicators deteriorated and one was unchanged. Of the indicators that improved, 15 made negative contributions. [Download PDF News Release]
The latest headline index at 0.14 came in below the Investing.com forecast of 0.20.
The Chicago Fed’s National Activity Index (CFNAI) is a monthly indicator designed to gauge overall economic activity and related inflationary pressure. It is a composite of 85 monthly indicators as explained in this background PDF file on the Chicago Fed’s website. The index is constructed so a zero value for the index indicates that the national economy is expanding at its historical trend rate of growth. Negative values indicate below-average growth, and positive values indicate above-average growth.
