Federal Reserve Bank (Fed) of Chicago National Activity Index

Chicago Fed National Activity Index provides monthly evaluation of the overall economic activity and inflationary pressure in the United States. It is calculated as a weighted average composite index, which combines 85 separate indicators of the national economy.

Economic indicators from the following four major categories are used for CFNAI calculation:

• Production and income (23 data series)
• Employment, unemployment, working hours (24 data series)
• Private consumption and households (15 data series)
• Sales, orders and inventories (23 data series)

These data series demonstrate various aspects of national economic activity. For convenience, all data are adjusted for inflation.

CFNAI is the only indicator, which reflects the combined movement of all 85 indicators. The individual weights of components are determined based on the historical value of the contribution of each indicator to the general combined movement of the index.

The index values range between +1 and -1, and the average value is 0. Since the economic activity tends to grow, the positive deviation of the average value indicates a growing trend, and a negative value points to a downtrend.

Economists use the indicator to measure the overall economic activity in the country. An increase in all components except for some of labor market indicators (unemployment), indicates the expansion of the national economy. Also, growth in production, wages, consumer spending and other national indicators allows evaluating current and near-term inflation.

Chicago Fed updates the index data monthly. It publishes a collection of tables and graphs, as well as explanations to them. The interpretation of the index depends on how individual components of the index move relative to each other. In general, higher CFNAI values have a better effect on dollar quotes.