Here's why:
* "It" is the subject of the sentence, the thing that is performing the action.
* "raining" is the action being performed, also known as the verb.
* There is no direct object in this sentence. A direct object would be the thing that receives the action of the verb. For example, "It is raining rain now" would have "rain" as the direct object.
In this case, "raining" is an intransitive verb, meaning it doesn't take a direct object.