The Chicago Fed National Activity Index (CFNAI) improved month over month. However, the index still remains negative. More importantly, my real time recession indicator, which utilizes the CFNAI data, remains negative.

The real time recession indicator is constructed from the Economic Cycle Research Institute's Leading Economic Indicator and the CFNAI data. Looking at figure 1, the red labeled price bars correlate to those times that the indicator predicts that the US economy is in a recession. The green analogue line in the lower panel corresponds to the actual recession calls made by the National Bureau of Economic Research. While not perfect (but what is), there is a high degree of correlation between the two.

Figure 1. Real Time Recession Indicator/ weekly

Figure 2. Real Time Recession Indicator/ weekly

The CFNAI indicator is constructed from 85 different variables of national economic activity, and it is designed to gauge overall economic activity and related inflationary pressure. You read about the index by clicking here: Chicago Federal Reserve.