Growth
Output, production, consumption, and credit — the real economy side of the inflation and rates picture.
Real GDP — YoY % Change
What it is: Real Gross Domestic Product, year-over-year percent change, measuring the inflation-adjusted output of the US economy.
Why it matters: GDP is the headline measure of growth — every other indicator on this page is a faster, narrower, or more leading version of what GDP eventually confirms.
How to read it: Trend US growth runs near 2% YoY; readings sustained below 1% historically coincide with recessions, while readings above 3% indicate above-trend expansion. GDP is reported quarterly with a lag, so the line is smooth but late — use it for confirmation, not signal.
Real GDP — YoY %, Long View
What it is: The same Real GDP YoY measure shown above, displayed from 1947 to present.
Why it matters: The long view shows that US trend growth has stepped down twice — from ~4% in the postwar decades, to ~3% from the 1980s through 2007, to ~2% in the post-financial-crisis era. The current "trend" is a moving target, not a constant.
How to read it: Compare the recent reading not to a fixed 2% benchmark but to the trend of the last 10–15 years. A 2% print is average today and would have been a recession warning in 1965. The recession bands also show that GDP rarely contracts deeply outside of NBER-dated downturns — a sub-zero quarterly print is itself a meaningful signal.
Real GDP vs Real Final Sales — YoY %
What it is: Real Final Sales of Domestic Product is GDP minus the change in private inventories — the part of output that was actually sold rather than stockpiled.
Why it matters: Inventory swings are noise; final sales is the cleaner read on demand. When the two diverge, the gap tells you whether growth is being driven by inventory build (temporary) or genuine demand (durable).
How to read it: When GDP runs above Final Sales, businesses are accumulating inventory — usually a late-cycle pattern that reverses sharply when demand softens. When Final Sales runs above GDP, businesses are drawing inventory down, often an early-recovery signal. Persistent gaps in either direction are more informative than the absolute level of either line.
Industrial Production — YoY %
What it is: The Federal Reserve's Industrial Production index measures the real output of manufacturing, mining, and utilities.
Why it matters: Industrial output is more cyclical than services and reported monthly, making it one of the earlier reads on whether the goods economy is expanding or contracting.
How to read it: Sustained YoY contraction (below zero for 3+ consecutive months) has historically coincided with NBER-dated recessions, with rare exceptions tied to one-off shocks like strikes or hurricanes. Brief dips during expansions are common and don't carry signal — the framework is duration and depth, not single readings.
Retail Sales — Nominal vs Real (CPI-Deflated), YoY %
What it is: Retail Sales in nominal dollars (as reported) and in real terms (deflated by CPI), both shown as YoY percent change.
Why it matters: The gap between the two lines is the inflation tax on consumption — the share of nominal spending growth that buys nothing additional in real terms. Nominal alone is misleading during inflation regimes.
How to read it: When the lines run together, inflation is contained and growth in spending equals growth in consumption. When nominal pulls sharply above real (as in 2021–2022), consumers are running faster just to stand still. Real retail sales turning negative while nominal stays positive is a classic late-inflation-cycle signal.
CFNAI — 3-Month Moving Average
What it is: The Chicago Fed National Activity Index is a weighted composite of 85 monthly indicators across production, employment, consumption, and sales, normalized so that zero equals trend growth.
Why it matters: CFNAI is a regime indicator on its own — a single number summarizing whether the broad economy is running above, at, or below trend. The 3-month moving average smooths monthly noise.
How to read it: The Chicago Fed publishes specific thresholds: readings above +0.7 signal sustained inflationary pressure from above-trend growth, readings below −0.7 increase the probability of a recession having begun, and readings below −1.5 signal that a recession is underway. Zero is trend growth — neither hot nor cold.
CFNAI — 3-Month Moving Average, Long View
What it is: The same CFNAI 3-month moving average shown above, displayed from 1967 to present.
Why it matters: Every NBER-dated recession since 1967 is visible in this chart, allowing the reader to calibrate what current readings mean against historical precedent. Recessions show up as sustained excursions below −0.7, with the deepest readings (−2 and lower) clustered in 1974, 1980, 1982, 2008, and 2020.
How to read it: The threshold lines (+0.7, 0, −0.7, −1.5) are the same as the primary chart. What the long view adds is precedent: a reading of −0.5 looks alarming on the recent chart but is unremarkable in the long history. A reading of −1.5 has historically meant a recession is already underway.
Bank Credit — YoY %
What it is: Total bank credit at all commercial banks (loans plus securities held), reported weekly, shown as year-over-year percent change.
Why it matters: Bank credit is the primary transmission channel from monetary policy to the real economy — when banks pull back, consumption and investment follow with a lag. It's a real-economy series, not a financial-conditions one, because what's measured is the flow of credit to households and businesses.
How to read it: Credit growth turning negative is one of the cleanest recession signals in the post-war record — it has preceded or coincided with every US recession since 1960. Decelerating positive growth is also informative: a drop from 8% to 2% over a few quarters typically indicates tightening lending standards even before the YoY number turns negative.
Bank Credit — YoY %, Long View
What it is: The same Bank Credit YoY measure shown above, displayed from 1973 to present.
Why it matters: Bank credit history is one of the clearest records of the US monetary cycle — the 1970s credit expansion, the 1980s S&L cycle, the deleveraging from 2008 to 2011, and the post-COVID surge are all visible. Credit growth is the channel through which monetary regime changes reach the real economy.
How to read it: Sustained periods of credit growth above 10% have historically preceded inflation episodes; sustained periods below 2% have coincided with weak demand and recession. The 2008–2011 period is the only outright contraction in the post-1973 record. Watch for sharp accelerations or decelerations relative to the recent few years' average.
Real GDP vs Pre-COVID Trend (2010–2019 Baseline)
What it is: A log-linear regression fit through real GDP from 2010 to 2019, projected forward to compare against the actual path.
Why it matters: The 2010–2019 decade was the post-financial-crisis, zero-interest-rate, quantitative-easing era — a coherent monetary regime against which the post-COVID period can be measured. The gap between actual GDP and the projected trend is the cumulative deviation from that regime's growth path.
How to read it: A path running below the trend line means growth has been weaker than the prior decade implied; running above means stronger. Unlike the inflation gap (which opened sharply and has not closed), the real GDP gap closed by roughly 2023 — current growth runs in line with the pre-COVID extrapolation, even as the price level remains permanently higher.
Real GDP with Multi-Regime Trend Lines
What it is: Three separate log-linear trends fit through three distinct monetary regimes — Bretton Woods (1947–1973), the Great Moderation (1984–2007), and the post-GFC zero-bound era (2010–2019) — plotted alongside actual real GDP.
Why it matters: "Trend growth" is not a constant. Each monetary regime has produced its own growth trajectory, and the trend has stepped down at each regime change. The intervening periods (1974–1983 stagflation, 2008–2009 financial crisis) are deliberately not fit — the breaks themselves are part of the analytical content.
How to read it: The legend reports the fitted annualized growth rate for each regime. Each step down — from roughly 4% to 3% to 2.4% — coincides with a major monetary regime change. Current growth is best evaluated against the most recent regime's trend, not a long-run constant average. Whether the next regime returns to a higher growth path or settles below the recent trend is one of the central macro questions of the next decade.