What is Chicago Fed National Activity Index(CFNAI)

3 min readDec 26, 2022

What is it?

The Chicago Fed National Activity Index (CFNAI) is a monthly index that measures economic activity in the United States.
The CFNAI is a composite index that is constructed from 85 different economic indicators, including employment, industrial production, housing starts, and personal income.
These indicators are weighted and combined to create a single index value, which ranges from -1.00 to +1.00.
A value above zero indicates that economic activity is above trend, while a value below zero indicates that economic activity is below trend.

It is produced by the Federal Reserve Bank of Chicago and is designed to provide a broad overview of the economic conditions in the country.

The Chicago Fed National Activity Index (CFNAI) is calculated by combining 85 different economic indicators into a single index value.
The indicators used in the CFNAI include measures of employment, production, income, sales, and orders, as well as other data on housing, personal consumption, and business activity.
To calculate the CFNAI, the economic indicators are first divided into four broad categories:
First Category is production and income. Under this category Industrial production, real personal income, real manufacturing, and trade sales are included
The second category is Employment, unemployment, and hours Under this category the following items are included. Nonfarm payroll employment, unemployment rate, average weekly hours employment, unemployment
The 3rd category is Personal consumption and housing. They included real personal consumption expenditures and new and existing home sales.
The final category is Sales, orders, and inventories. It includes new orders for manufactured goods, factory orders for nondefense capital goods, inventories of raw materials
Each of these categories is assigned a weight based on its importance in the overall economy.
Next, the indicators within each category are…