What is Chicago Fed National Activity Index(CFNAI)

1 minute publication
3 min readDec 26, 2022
Photo by Christopher Alvarenga on Unsplash

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.

Who Reports It?

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.

How it is Generated?

  • 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…
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