U.S. Weekly Leading Index Now at Six-Decade Low

According to the U.S. Weekly Leading Index (US WLI) released on 11/07/08 published by Economic Cycle Research Institute (ECRI), economic growth continues to remain solidly in recession territory. Lakshman Achuthan of ECRI states:

With WLI growth diving to a new record low over its six-decade history, prospects for U.S. economic growth are worsening swiftly.

The US WLI has a slight lead over business cycles.

As a leading indicator, the WLI is demonstrating that economic conditions in the future are going to be worse than they are today. 

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Comments

[jepittman:]

Looks like there still is no data point to indicate how long and how deep this will go. The markets are discounting a lot however.

2008 Nov 09 11:13 AM

[peterthepai...:]

kipper ties an platform boots...an cars wot fall ta bits in 6 years...innit!

2008 Nov 09 12:41 PM

[Stanley Oliver:]

Unless the engine that has driven the economy in the past ( ie: consumer) is replaced by a new engine the economy will not be expanding anytime soon.

1. Consumers account for 3/4 of GDP and with the sharp nose dive that began in Mar '07 in personal consumption expenditure (PCE) it will take an increase in real hourly earnings to make a positive impact to PCE.

2. Real hourly earnings have declined by 1% since Jan '07 and it looks to be heading lower as companies cut costs (ie: auto industry will slash wages soon).

3. Unemployment is forecast to reach higher levels than previously expected.

1,2 and 3 = contraction in consumer spending which = lower operating earnings

BONUS: Rate are heading lower but will eventually need to rise again. Increase in rates has historically been negative for consumer spending
Fed funds increase during 3rd quarter '92 - first quarter '95 = pushed PCE lower. Same things happened during FF increase '99 - '00 as well as '04 - '05.

2008 Nov 09 10:16 PM