CFNAI (Economic Activity)

Measures current economic activity relative to trend.

The Chicago Fed National Activity Index aggregates 85 economic indicators. Zero means trend growth; positive indicates above-trend; negative indicates below-trend.

Formula

CFNAI Score: Positive values (expansion) to +100, Negative values (contraction) to -100

Methodology

The CFNAI is one of the most comprehensive measures of US economic activity. It combines 85 monthly indicators across four categories:

1. Production & Income (23 indicators) 2. Employment, Unemployment & Hours (24 indicators) 3. Personal Consumption & Housing (15 indicators) 4. Sales, Orders & Inventories (23 indicators)

Interpretation: - CFNAI = 0: Economy growing at historical trend - CFNAI > 0: Above-trend growth (expansion) - CFNAI < 0: Below-trend growth (contraction risk) - CFNAI < -0.7 (3-month average): High recession probability

The CFNAI is designed to be centered at zero, making it easy to identify whether current conditions are above or below trend. Its breadth makes it less susceptible to noise from any single indicator.

How to Interpret

RangeLabelMeaning
≥ 0.35Strong ExpansionWell above trend growth
0 to 0.35Above TrendModest expansion above historical average
-0.35 to 0Below TrendGrowth below historical average
< -0.35Contraction RiskSignificantly below trend - recession risk elevated

Data Source

Chicago Federal Reserve Bank monthly release via FRED.

Reference

Chicago Federal Reserve (2024). Chicago Fed National Activity Index. Federal Reserve Bank of Chicago

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For Educational Purposes Only

This analysis is not investment advice. Results are based on simplified models using historical data. Past performance does not guarantee future results. All investments carry risk of loss. Consult a qualified financial advisor before making investment decisions.