US economic growth decelerated last month, according to today's update of The Chicago Fed National Activity Index, a macro benchmark based on 85 indicators. "The index's three-month moving average, CFNAI-MA3, decreased to +0.10 in January from +0.26 in December, marking its fifth consecutive reading above zero," the Chicago Fed reports.
Although the January CFNAI-MA3 came in below expectations (relative to our median forecast), this index of economic activity continues to reflect an "above trend" expansion, as reflected in CFNAI-MA3's marginally positive value. Based on the guidelines published for this index, today's update shows that recession risk remained low in January. CFNAI-MA3's current +0.10 level is well above the critical -0.70 mark. Only when CFNAI-MA3 falls below -0.70, after a period of economic expansion, would such a decline reflect "an increasing likelihood that a recession has begun," according to the Chicago Fed.
Meanwhile, today's modestly positive number is in line with the February 21 update of The Capital Spectator's Economic Trend & Momentum indices, which also indicate that business cycle risk remains low.