CFNAI Indicates Above-Trend Economic Growth Again in December

The Chicago Fed National Activity Index was +0.13 in December, the fourth consecutive positive monthly reading. November’s CFNAI was revised up from +0.55 to +0.68, the highest value since October 1999. Three of the four broad categories of indicators that comprise the index (see sidebar) made positive contributions in December; only the employment-related category made a negative contribution. The three-month moving average, CFNAI-MA3, fell moderately in December, to +0.35, from an upward-revised November reading of +0.46. CFNAI-MA3 readings above zero are associated with above-trend economic growth; accordingly, the CFNAI-MA3 value of +0.35 suggests that growth in national economic activity was above its historical trend in December. With regard to inflation, CFNAI-MA3 values above zero signal increased inflationary pressures over the coming year.