The Chicago Fed National Activity Index (CFNAI) posted a sharp rise in November, an indication that “economic activity increased” last month, the Chicago Federal Reserve reports. CFNAI’s three-month moving average moved higher as well, rising to -0.20 last month. That’s close to The Capital Spectator’s average econometric forecast for CFNAI of -0.26, which was published yesterday. A reading above -0.70 for CFNAI’s three-month average suggests that the economy is growing, which is also the message in today’s news on personal income and spending for November.

“Two of the four broad categories of indicators that make up the index increased from October, but only the production and income category made a positive contribution to the index in November,” the Chicago Fed notes. Nonetheless, today’s rebound is significant because there was no margin for error left after October’s update, which left the three-month average of the index just above the recession-level mark of -0.70. The November estimate, by contrast, moves the index well above that danger zone.

Yet the CFNAI’s below-zero reading for the three-month-average reading is a reminder that economic activity remains below its historical trend. In other words, the economy is growing, but only modestly. That said, assuming anything darker at the moment isn’t supported by the latest CFNAI estimate, which equates with a pace of economic expansion that still looks strong enough to keep the business cycle from falling over the edge. That was the November my projection from earlier this month, via The Capital Spectator Economic Trend Index, a forecast that is more or less confirmed in today’s CFNAI update.