Chicago Fed Nat’l Activity Index Is Positive For 2nd Straight Month

For the first time in a year, the Chicago Fed National Activity Index (CFNAI)—a broad measure of the U.S. economy—posted a positive reading for the second month in a row. Nonetheless, the pace slowed, with CFNAI slipping to +0.22 for January from December’s +0.54. Meanwhile, the three-month moving average (CFNAI-MA3) rose slightly to +0.14 last month, up from +0.06 in December, which the Chicago Fed advises is a sign “that growth in national economic activity was slightly above its historical trend.”

CFNAI is a weighted average of 85 indicators of U.S. economic activity. The Chicago Fed recommends reading its 3-month moving average (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 rule, the January CFNAI-MA3 reading of +0.14 suggests that the economy will continue growing for the foreseeable future.

The bank reports that 50 of the 85 indicators made positive contributions last month, up from 48 positive contributors in December. But with gasoline prices rising, some analysts are warning that January’s positive profile may be out of date. In that case, much is riding on Thursday’s weekly update on initial jobless claims (again) for a more timely reflection of economic activity. Last week’s claims number provided a fresh dose of macro optimism, although the consensus forecast doesn’t expect much of a change for Thursday’s release, according to But with energy related anxiety rising, simply holding on to the recent decline in new claims may be enough to convince the crowd that the economic recovery will survive.