Source: Federal Reserve Bank of Chicago
What is the Survey of Economic Conditions?
Contacts located in the Seventh Federal Reserve District are asked to rate various aspects of economic conditions along a seven-point scale ranging from "large increase" to "large decrease." A series of diffusion indexes summarizing the distribution of responses is then calculated.
How are the indexes constructed?
Respondents' answers on the seven-point scale are assigned a numeric value ranging from +3 to –3. Each diffusion index is calculated as the difference between the number of respondents with answers above their respective average responses and the number of respondents with answers below their respective average responses, divided by the total number of respondents. The index is then multiplied by 100 so that it ranges from +100 to −100 and will be +100 if every respondent provides an above-average answer and –100 if every respondent provides a below-average answer. Respondents with no prior history of responses are excluded from the calculation.
What do the numbers mean?
Respondents' respective average answers to a question can be interpreted as representing their historical trends, or long-run averages. Thus, zero index values indicate, on balance, average growth (or a neutral outlook) for activity, hiring, capital spending, and cost pressures. Positive index values indicate above-average growth (or an optimistic outlook) on balance, and negative values indicate below-average growth (or a pessimistic outlook) on balance.
Beginning with the May 12, 2020 release, the CFSEC moved to a monthly release schedule. This release, with data for April 2020, now contains estimated monthly historical values for the CFSEC indexes, as will all future releases. For additional information on how the survey and indexes changed, see the CFSEC FAQs available here.
Prior to April 2022, the Chicago Fed Survey of Economic Conditions was named the Chicago Fed Survey of Business Conditions (CFSBC). The name change was made to better represent the survey’s aim and base of respondents. The goal of the survey is to assess the state of the economy in the Seventh Federal Reserve District. Moreover, since the beginning of the survey, it was been filled out by both business and nonbusiness contacts.
Federal Reserve Bank of Chicago, Chicago Fed Survey of Economic Conditions: Nonmanufacturing Activity Index in Federal Reserve District 7: Chicago [CFSBCACTIVITYNMFG], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/CFSBCACTIVITYNMFG, December 9, 2023.