Original charts and post at ECRI's WLI Growth Rate Inches Higher
The Economic Cycle Research Institute, ECRI - a New York-based independent forecasting group, released their latest readings for their proprietary Weekly Leading Index (WLI) this morning. (More about ECRI) For the week ending October 8, 2010
- WLI is 122.4, down from the prior week's reading of 123.7.
- The lowest reading for WLI this year was 120.4 for the week ending July 16.
- Since apparently bottoming at -10.3 for the week of August 27, WLI growth moved higher for the sixth consecutive week to minus 6.9% from minus 7.0% a week ago.
- The last positive reading for WLI growth was for the week ending May 28, 2010 when it stood at positive 0.1%.
- The WLI for the week ending 10/15/10 will be released on 10/22/10.
- Occasionally the WLI level and growth rate can move in different directions, because the latter is derived from a four-week moving average.
- ECRI uses the WLI level and WLI growth rate to HELP predict turns in the business cycle and growth rate cycle respectively. Those target cycles are not the same as GDP level or growth, but rather a set of coincident indicators (including production, employment income and sales) that make up the coincident index. Based on two additional decades of data not available to the general public, there are a couple of occasions (in 1951 and 1966) when WLI growth fell well below negative ten, but no recessions resulted (although there were clear growth slowdowns).
KEY ECRI Articles:
- Sept. 24, 2010 ECRI - Premature to Predict New Recession
- Dec. 04, 2009: ECRI Warns of Lasting High Unemployment Despite Economic Recovery
- July 31, 2009: ECRI Predicts End of Home Price Downturn
- July 21, 2009: ECRI Predicts The End of the Recession is Imminent
- April 3, 2009: ECRI Says US Business Cycle Recovery Ahead
- March 28, 2008: ECRI Calls it "A Recession of Choice"
Disclosure: Long SPY