The Chicago, Illinois index known as the National Activity Index (CFNAI) provides valuable insights into the nation’s economic activity and inflationary pressure. Comprised of 85 monthly indicators, the CFNAI serves as a forward-looking indicator that forecasts the economic outlook in the near future. Identified as one of the crucial yet often overlooked economic indicators, the CFNAI offers a snapshot of the economy’s growth trends, with zero indicating historical average growth, negative values suggesting below-average growth, and positive values indicating above-average growth. The latest CFNAI report for June signaled a decrease in economic growth compared to the previous month, with the index dropping to +0.05 from +0.23 in May.

Analyzing the trend since 2007, the index’s three-month moving average (CFNAI-MA3) provides a more reliable indicator of economic activity, showing a modest increase to -0.01 in June from -0.08 in May. Despite the general positive correlation between the CFNAI-MA3 and economic expansion, the past year has shown a deviation from this pattern, with negative readings persisting since November 2022, even as the US economy continued to grow. An examination of historical data dating back to March 1967 paints a comprehensive picture of the CFNAI’s performance over the decades.

Delving into the components of the CFNAI, which include production and income, employment, unemployment, personal consumption, housing, sales, orders, and inventories, the index’s overall decline in June was influenced by decreases in three out of the four main categories. By analyzing and comparing the individual components of the CFNAI since 1967, with a focus on the past year, economists gain valuable insights into the economy’s fluctuations. Utilizing a three-month moving average strategy to smooth out the data, the charts present a clearer picture of the index’s trajectory and its relation to economic cycles.

The long-term analysis of the CFNAI data series, drawing a linear regression through the index, highlights a declining trend in national activity since the late 1960s. This trend aligns with the transition from a production-focused economy to a service-oriented economy in the information age. As market analysts and policymakers continue to monitor the CFNAI for economic cues, the index serves as a critical tool for evaluating the nation’s economic health and trajectory.