A different way to review the Chicago Fed National Activity Index

by Scott Brave, senior business economist, and Max Lichtenstein, senior associate economist

Chicago Fed Letter

Recent readings of the CFNAI offer some optimism for economic growth in 2012. Production- and employment-related indicators have rebounded significantly from mid-2011. However, the housing market continues to be a substantial drag on the index; and sales, orders, and inventories indicators have yet to demonstrate sustained strength. That said, recent trends in the CFNAI Diffusion Index are suggestive of economic growth slightly above its long-term trend in 2012, which would mark another year of recovery as well as an improvement from 2011. As part of our continuing efforts to track economic activity, we will be making the CFNAI Diffusion Index available in future CFNAI releases.