The US economy posted a slightly stronger pace of growth in June, “led by improvements in production-related indicators,” according to today’s release of the Chicago Fed National Activity Index, a weighted average of 85 economic data sets. The improvement boosted the three-month moving average (CFNAI-MA3) of the Chicago Fed Index to -0.26 last month, up modestly from the revised -0.37 for May. The increase in the three-month average is slightly better than my average econometric forecast for this benchmark.
CFNAI-MA3 offers “a more consistent picture of national economic growth,” the Chicago Fed advises. By that standard, the US economy is still expanding at a pace that’s only slightly below its historical trend as of last month. (A zero reading for CFNAI-MA3 equates with economic conditions that match the historical trend.)
Based on the guidelines published for this index, today’s update also shows that recession risk was low in June. A CFNAI-MA3 value below -0.70 after a period of economic expansion “indicates an increasing likelihood that a recession has begun,” according to the Chicago Fed. By that measure, last month remained convincingly in the growth camp. A similar analysis was dispatched in last week’s update of The Capital Spectator’s Economic Trend & Momentum indices.