Concerning the view the US financial system was in recession earlier this yr (e.g., this observer lower than a month in the past), the CFNAI has the next takes:
The three month shifting common of the CFNAI dropped beneath 0 (i.e., dropped beneath pattern progress) in Could and June. The notes for the CFNAI point out “Following a interval of financial growth, an growing chance of a recession has traditionally been related to a CFNAI-MA3 worth beneath –0.70.” The CFNAI-MA3 didn’t breach this threshold.
As for the indications from the variety of indicators falling or rising (i.e., a diffusion index), we’ve the next image.
From the notes:
The CFNAI Diffusion Index represents the three-month shifting common of the sum of absolutely the values of the weights for the underlying indicators whose contribution to the CFNAI is constructive in a given month much less the sum of absolutely the values of the weights for these indicators whose contribution is damaging or impartial in a given month. Durations of financial growth have traditionally been related to values of the CFNAI Diffusion Index above –0.35.
So, I (nonetheless) don’t see a recession in 2022H1.
