Chicago Fed Index Still in Slowdown Mode
According to the Chicago Fed National Activity Index (CFNAI), August economic growth was below average. The Chicago Fed National Activity Index was –0.57 in August, down from 0.03 in July. The production and employment indicators showed the most significant change from the previous month, though all four categories of data made negative contributions to the index in August.
What does that mean? According to the Chicago Fed itself, when the CFNAI-MA3 value moves below 0.70 following a period of economic xpansion, there is an increasing likelihood hat a recession has begun. When the CFNAI-MA3 value moves above +0.70 more than two years into an economic expansion, there is an increasing likelihood that a period of sustained increasing inflation has begun.
So, there isn’t an increasing likelihood that a recession has begun, but perhaps increasing likelihood that in the near future the likelihood will increase.
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