The Chicago Fed National Activity Index’s three-month average (CFNAI-MA3) posted a fractional increase in May. Although growth remains below trend, the business cycle benchmark’s three-month average ticked higher for the second month in a row and is currently at its highest level since January. As such, recession risk remains low, based on the three-month average of the index, which rose to -0.16 last month—well above the -0.70 mark that signals the start of new recessions, according to Chicago Fed guidelines.

“Two of the four broad categories of indicators that make up the index increased from April, but only the employment, unemployment, and hours category made a positive contribution to the index in May,” the Chicago Fed noted in yesterday’s press release.

Analzying the updated CFNAI-MA3 data with a probit model continues to show that the probability is low (roughly 7%) that a recession started in May (a view that jibes with last week’s update on business cycle risk via The Capital Spectator’s proprietary indexes). The current risk estimate in the chart below is based on a probit regression that analyzes the historical record of NBER’s business cycle dates with CFNAI-MA3.