US economic growth remained “above trend” in May, according to this morning’s update of the Chicago Fed National Activity Index, a weighted average of 85 indicators. For the third consecutive month, the three-month average of the index (CFNAI-MA3) posted a reading above zero. This business cycle benchmark decreased modestly to +0.18 from a revised estimate of +0.31 for April, although the decline still leaves CFNAI-MA3 well above the neutral mark. As a result, recession risk remained low as of May.

The Chicago Fed recommends reading its 3-month moving average (CFNAI-MA3) as follows: a value below -0.70 after a period of economic expansion “indicates an increasing likelihood that a recession has begun.” By that standard, today’s data suggests that economic growth will prevail for the near-term future, a forecast that echoes the analysis on these pages via last week’s update of the US Economic Profile through May.