(By Kevin Donovan) The Federal Reserve Bank of Chicago National Activity Index (CFNAI) dipped into negative territory in May, adding to the stream of data indicating a spring slowdown, if not outright contraction, in the U.S. economy.
THE CNFAI came in at -0.45 in May, compared with +0.08 in April. The three-month moving average dropped to -0.34 from -0.18.
The CFNAI is a weighted average of 85 existing monthly indicators) of national economic activity. It is constructed to have an average value of zero and a standard deviation of one. Since economic activity tends toward trend growth rate over time, a positive index reading corresponds to growth above trend and a negative index reading corresponds to growth below trend, according to the Chicago Fed.
The 85 economic indicators in the CFNAI are drawn from four broad categories of data: production and income; employment, unemployment, and hours; personal consumption and housing; and sales, orders, and inventories. Each of these data series measures some aspect of overall macroeconomic activity. The derived index provides a single, summary measure of a factor common to these national economic data, according to the Chicago Fed.