US economic growth slowed in June, according to the Chicago Fed National Activity Index. The benchmark’s three-month average (CFNAI-MA3) fell to +0.13 last month from an upwardly revised +0.28 for May. Today’s update was in line with The Capital Spectator’s median econometric forecast.
Despite the decline, last month’s growth remained above trend relative to the historical record, accord to CFNAI-MA3, which is based on a weighted average of 85 indicators. Readings above the the zero mark indicate above-trend growth. The positive value for June represents the fourth straight month of an above-average pace for the expansion relative to the historical record.
The latest update also indicates that recession risk remained low in June. The Chicago Fed recommends reading CFNAI-MA3 as follows: a value below -0.70 after a period of economic expansion “indicates an increasing likelihood that a recession has begun.” By that standard, today’s data suggests that economic growth will prevail for the near-term future, a forecast that echoes the analysis on these pages in last week’s update of the US Economic Profile through May.