Moderation in Economic Growth Confirmed - February 27, 2019

The Chicago Fed’s National Activity Index is comprised of 85 separate economic indicators. It’s far from a household name but offers an excellent summary on the economy.

  • January’s reading was the lowest since May.
  • The 3-month moving average, which smooths out monthly volatility, registered its lowest reading since September 2017.
  • The index is NOT sending a recessionary signal.
  • It is confirming a moderation in U.S. economic growth.

Q4’s GDP report, which was delayed by the government shutdown, will be released Thursday.

  • Economists surveyed by Econoday project a slowdown from an annualized pace of 3.4% in Q3 to 2.2% in Q4.
  • The Atlanta Fed’s GDPNow model projects 1.8% (a/o Feb 26).

Investor’s Corner

Stocks are off to a strong start this year.

In part, conditions were extremely oversold in late December. But continued economic growth, a more flexible Fed, and progress between the U.S. and China on a trade deal have played an important role.

Volatility should never be ruled out, but a diversified financial plan that takes a wide range of variables into account has historically been the best path to reaching one’s financial goals.

Among other things, it can help manage risk during rockier times while allowing the investor to participate during up markets.