CFNAI Indicates Economic Growth Above Trend in December

The Chicago Fed National Activity Index was +0.08 in December, down from +0.59 in November. Two of the four broad categories of indicators that make up the index made small positive contributions, and two made small negative ones (see sidebar). The three-month moving average, CFNAI-MA3, was +0.55 in December, up from +0.26 in November. This increase largely reflects the fact that the hurricane-related decline in September’s CFNAI is no longer entering the three-month moving average. A CFNAI-MA3 reading above zero is associated with above-trend economic growth; accordingly, the CFNAI-MA3 value of +0.55 in December suggests that growth in national economic activity was above its historical trend. With regard to inflation, a CFNAI-MA3 value above zero indicates the potential for inflationary pressures over the coming year.