The January National Activity Index (CFNAI) from the Chicago Federal Reserve provides another sign of improving economic momentum. The index slipped to 0.22 from 0.54 in December, which was revised up from 0.17. However, the three-month moving average rose to 0.14 which was its highest since last March. The figures had been negative since then. During the last ten years there has been an 80% correlation between the Chicago Fed Index and the q/q change in real GDP.

A lower Production & Income component was behind most of the m/m deterioration in the total. Offsetting that decline was a rise in the Employment, Unemployment & Hours series to its highest since last February. The Chicago Fed reported that fifty of the 85 individual indicators made positive contributions to the index in January while 35 made negative contributions.

The CFNAI is a weighted average of 85 indicators of national economic activity. It is constructed to have an average value of zero and a standard deviation of one. Since economic activity tends toward trend growth rate over time, a positive index reading corresponds to growth above trend and a negative index reading corresponds to growth below trend. During August, 41 of the 85 component series made a positive contribution to the overall index while 44 made negative contributions.

The Chicago Federal Reserve figures are available in Haver's SURVEYS database.

Forecasting inflation with a lot of data from the Federal Reserve Bank of Chicago is available here.