The three-month average of the Chicago Fed National Activity Index (CFNAI) is expected to slip fractionally, falling slightly deeper into negative territory in the May update that’s scheduled for tomorrow (May 22), based on The Capital Spectator’s average point forecast for several econometric estimates. The projection for -0.24 is a touch below the -0.23 reading for April, which reflects a below-average pace of economic growth for the US relative to the historical trend. Only negative values below -0.70 indicate an “increasing likelihood” that a recession has started, according to guidelines from the Chicago Fed. Using today’s estimate for May as a guide, CFNAI’s three-month average is expected to remain at a rate of growth that’s below the historical trend but still well above the tipping point that marks the start of a new recession.
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