The Chicago Fed's National Activity Index, which we reported on earlier this week, is based on 85 economic indicators drawn from four broad categories of data:
- Production and income
- Employment, unemployment, and hours
- Personal consumption and housing
- Sales, orders, and inventories
The complete list is available here in PDF format.
In Thursday morning's Chicago Fed update, we learned that the CFNAI rose to +0.23 in January from -0.46 in December. Three of the four broad categories made positive contributions in January to the CFNAI, with production contributing +0.04, employment contributing +0.12, and personal consumption contributing +0.13. These three categories all improved from December. The final category of sales saw a setback to -0.06 in January from +0.07 in December.
A chart overlay of the complete multi-decade span of all four categories, even if we use the three-month moving averages, is quite challenging for visual clarity:
Here is a close-up view since 2000:
Here is a set of charts showing each of the four components since 1967 with callouts for the last year. Because of the highly volatile nature of the data, the charts are based on three-month moving averages, a smoothing strategy favored by the Chicago Fed economists. The values for the months that the NBER subsequently identified as recession starts are also indicated.
To close this dissection of the CFNAI components, let's reassemble them for a closer look at their collective three-month moving averages since 2007.
Check back next month for another close-up look at the latest trend directions.
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