May 25, 2021 - Economy

Chicago Fed index shows U.S. economy struggling to lift off after March rebound

Data:; Chart: Dion Rabouin/Axios Visuals
Data:; Chart: Dion Rabouin/Axios Visuals

The Chicago Fed's National Activity Index showed the U.S. economy was growing above trend in April but had slowed significantly from March's big rebound, suggesting the economy is having a difficult time gaining traction for a sustained rebound.

By the numbers: April's 0.24 reading was down significantly from the 1.7 reading in March, which followed the first negative reading in almost a year for the index.

What it means: The Chicago Fed's index seeks to answer the question, "Is the economy growing at a rate faster than its potential or slower than its potential?" using a weighted average of 85 existing monthly indicators of U.S. economic activity.

  • The index is composed of four broad categories of data: production and income; employment, unemployment and hours; personal consumption and housing; and sales, orders and inventories.
  • It is constructed to have an average value of zero and a standard deviation of one.

Watch this space: "The personal consumption and housing category contributed –0.06 to the CFNAI in April, down from +0.50 in March," the Chicago Fed said.

  • "The indicators in this category broadly deteriorated from March. The contribution of the employment, unemployment, and hours category to the CFNAI decreased to +0.05 in April from +0.38 in March."
Go deeper