• Data suggest recession is ending.

• Production & income rise while employment holds fairly steady.

The Federal Reserve Bank of Chicago reported that the National Activity Index (CFNAI) increased to 4.11 during June from 3.50 in May, revised from 2.61. It had fallen to -18.09 in April. The three-month moving average of the index improved m/m to -3.49 from -6.36 in May. During the last 20 years, there has been a 72% correlation between the Chicago index and the q/q change in real GDP.

Performance amongst the four components of the index was mixed last month. The Production series improved markedly to 2.22. It had increased to 0.84 in May after falling to a record low of -5.77 in April. The Employment, Unemployment & Hours series held fairly steady at 1.74, but was greatly improved versus April's record low of -8.82. Working the other way, the Personal Consumption & Housing gauge eased m/m to 0.40 from 0.89. It remained up sharply, however, versus April's low of -1.28. Also deteriorating m/m, the Sales, Orders and Inventories index turned negative, but less so than in April.

The diffusion index of the CFNAI, which measures the breadth of component change, improved to a neutral 0.00, which was the strongest signal since January.

The CFNAI is a weighted average of 85 monthly 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.

These figures are available in Haver's SURVEYS database.