The Census Bureau Index of Economic Activity (IDEA) time series is presented in a process control chart. Control charts
are useful because they help distinguish between variation that is inherent in a process and is therefore expected
versus variation that is unusual and, in many cases, unexpected. Recall that the IDEA combines measures of month-to-month
change of 15 distinct monthly series into a single (standardized) series with a mean of zero and a standard deviation
of 1.
Consequently, the centerline of the control chart is at zero. The chart highlights four distinct regions moving from the
bands in the darkest shade of blue out to the band in the lightest shade of blue:
- Values falling within ±1 standard deviation of the centerline (darkest shade of blue).
- Values below ±2 standard deviations and above ±1 standard deviation of the centerline.
- Values below ±3 standard deviations and above ±2 standard deviations of the centerline.
- Values above ±3 standard deviations of the centerline (lightest shade of blue).
The gray shaded time periods in the display denote recession periods, as defined by the National Bureau of Economic
Research. Read more at
https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions.
Percentage changes for each non-IDEA data series displayed in the graph are presented without error bounds. Many of
these series are subject to sampling and nonsampling errors. Information on the sources and extent of known variability
in the component series can be found by visiting individual sites for each series linked in the cards below the IDEA
data visualization in the Briefing Room.