07 February 2014: ECRI's WLI Is Showing Failure to Launch

February 14th, 2014
in econ_news, syndication

ECRI's WLI Growth Index declined but remains in positive territory. A positive number predicts positive growth to come within the next six months. The index decline was attributed by ECRI as a "failure to launch" which is covered below.

Follow up:

Current ECRI WLI Level and Growth Index

Please read The U.S. Business Cycle in the Context of the Yo-Yo Years which is an update on ECRI's recession call.

Here is a current statement from ECRI:

Failure to Launch

The year 2014 began with a clear consensus that the economy was "taking off" and would soon reach "escape velocity." We disagreed.

So, we said in January on CNBC: “What’s bothersome is that right now the consensus is that we are 'taking off,' we are approaching ‘escape velocity’ ... We just don’t see that when we’re looking at the data... in the forward-looking indicators, in the coincident data on jobs, it’s not there.”  

It is now quite clear that the economy is decelerating, not accelerating, with growth in ECRI's Weekly Coincident Index (see chart) falling rapidly.

Here is this weeks update on ECRI's Weekly Leading Index (note - a positive number indicates growth):

ECRI WLI Improves

A measure of future U.S. economic growth declined.

The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index declined from 133.2 to 132.2 in the week ended 07 February.

The index's annualized growth rate was 3.3 percent, down from 4.2 percent.

ECRI produces a monthly issued Coincident index. The January update for December shows the rate of economic growth declining marginally month-to-month - but is still showing reasonable growth. The current values:

U.S. Coincident Index

/images/z ecri_coin.png

ECRI produces a monthly inflation index - a positive number shows decreasing inflation pressure.

U.S. Future Inflation Gauge

/images/z ecri_infl.PNG



US Future Inflation Gauge Ticks Up

U.S. inflationary pressures were slightly higher in January, as the U.S. future inflation gauge climbed to 101.4 from the December 100.7 reading, according to data released Friday morning by the Economic Cycle Research Institute.

"The USFIG stands well below its earlier highs, and is still close to October's 22-month low," ECRI Chief Operations Officer Lakshman Achuthan said in a release, "Thus, underlying inflation pressures remain restrained."

ECRI produces a monthly issued Lagging index. The Decembers economy's rate of growth degraded slightly.

U.S. Lagging Index

/images/z ecri_lag.PNG

source: ECRI



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