The three-month average of the Chicago Fed National Activity Index (CFNAI) is expected to rise fractionally in the July update that’s scheduled for tomorrow (Aug. 24), based on The Capital Spectator’s average point forecast for several econometric estimates. The projection for 0.04 is slightly above the -0.01 reading for June, which reflects a below-average pace of economic growth for the US relative to the historical trend. Only negative values below -0.70 indicate an “increasing likelihood” that a recession has started, according to guidelines from the Chicago Fed. Using today’s estimate for June as a guide, CFNAI’s three-month average is expected to reflect an expansion that’s close to the historical trend rate for growth and therefore well above the tipping point that marks the start of a new recession.
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