James Picerno

About the Author James Picerno

James Picerno is a financial journalist who has been writing about finance and investment theory for more than twenty years. He writes for trade magazines read by financial professionals and financial advisers. Over the years, he’s written for the Wall Street Journal, Barron’s, Bloomberg Markets, Mutual Funds, Modern Maturity, Investment Advisor, Reuters, and his popular finance blog, The CapitalSpectator.

Chicago Fed: US Growth At Slightly Above-Trend Pace In August

US economic activity in August increased at a pace that’s fractionally above the historical trend, according to this morning’s update of the Chicago Fed National Activity Index’s three-month average (CFNAI-MA3). Last month’s reading of +0.01 ticked down from July’s revised +0.02 level, but both numbers reflect an upbeat macro trend.

Meanwhile, the sharp decline in the monthly data for this benchmark may be a warning sign for the months ahead. The drop to -0.41 marks the lowest reading in six months.

The monthly figures are noisy, which is why the Chicago Fed recommends focusing on the three-month average for monitoring the business cycle. By that standard, the economic trend still looks encouraging. CFNAI-MA3’s current +0.01 level is well above the -0.70 mark that signals the start new recessions, according to Chicago Fed guidelines.


Analyzing the updated CFNAI-MA3 data with a probit model also shows that the probability is low (below 4%) that a recession started in August. The current risk estimate in the chart below is based on a probit regression that reviews the historical record of NBER’s business cycle dates in context with CFNAI-MA3. The low risk estimate aligns with last week’s update of business-cycle risk via The Capital Spectator’s proprietary indexes.



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