“Index shows Economic Growth Picked Up in April.” This is the headline for today’s release of the Chicago Fed’s National Activity Index, and here are the opening paragraphs from the report:

Led by improvements in production-related indicators, the Chicago Fed National Activity Index (CFNAI) rose to +0.10 in April from –0.55 in March. All four of the broad categories of indicators that make up the index increased from March, but three of the four categories made nonpositive contributions to the index in April.

The index’s three-month moving average, CFNAI-MA3, decreased to –0.22 in April from –0.18 in March. April’s CFNAI-MA3 suggests that growth in national economic activity was somewhat below its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests subdued inflationary pressure from economic activity over the coming year.

The CFNAI Diffusion Index, which is also a three-month moving average, increased to –0.17 in April from –0.22 in March. Forty-five of the 85 individual indicators made positive contributions to the CFNAI in April, while 40 made negative contributions. Fifty-four indicators improved from March to April, while 31 indicators deteriorated. Of the indicators that improved, 16 made negative contributions. [Download PDF News Release]

The previous month’s CFNAI was revised downward from -0.44 to -0.55.

Background on the CFNAI

The Chicago Fed’s National Activity Index (CFNAI) is a monthly indicator designed to gauge overall economic activity and related inflationary pressure. It is a composite of 85 monthly indicators as explained in this background PDF file on the Chicago Fed’s website. The index is constructed so a zero value for the index indicates that the national economy is expanding at its historical trend rate of growth. Negative values indicate below-average growth, and positive values indicate above-average growth.