The Chicago Fed's top economic index suggests the US entered a recession in March
- The Chicago Fed's National Activity Index slid to -4.19 across all four segments in March, suggesting the US entered a recession soon after lockdown measures took effect.
- Of the 85 metrics used in the index, 65 read negative over the period while 18 jumped and two were neutral.
- The index's three-month moving average tanked to -0.32 from -0.21 in February. A reading below -0.7 is associated with an increased likelihood of recession, the central bank said.
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The Federal Reserve Bank of Chicago's benchmark economic measurement plummeted to recessionary levels in March as the nation grappled with business closures, skyrocketing unemployment, and feeble demand.
The central bank's National Activity Index declined to -4.19 across the four broad segments creating the metric, its lowest level since the financial crisis. Of the 85 indicators used in the metric, 65 read negative, 18 gained, and two stood neutral.
February's reading was revised lower to 0.06 from 0.16. The index's three-month moving average tanked to -0.32 from -0.21 in February.
The index's zero value suggests the economy is growing at its expected trend. Values for the three-month average below -0.7 indicate "an increasing likelihood of a recession," the Fed said.
The index's bleak reading arrives as numerous other indicators call for a sharp economic downturn through the first half of the year. Retail sales data published Wednesday showed a record 8.7% decline in March as consumers braced for a prolonged economic lockdown.
Unemployment is also surging amid the virus-induced slump. Jobless claims filed over the past four weeks surpassed 22 million, erasing all jobs made since the 2008 recession.
The Fed's index reflects data up to April 16. The metric's next update is scheduled to be released at 8:30 a.m. ET on May 26.
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