17 October 2014: ECRI's WLI Goes to the Dark Side. Statistically No Economic Growth Is Being Forecast.

October 24th, 2014
in econ_news

ECRI's WLI Growth Index declined , and has trespassed marginally into negative territory declining each week for the last 5 weeks - and forecasting literally no growth over the next six months. The growth index is at the lowest level seen since August 2012. ECRI released their coincident and lagging indices this week and are shown below.

Follow up:

Current ECRI WLI Level and Growth Index

A twitter exchange today relating to the drop of the WLI into negative territory:

tweet question: "And that drop was not near highs but lows of the market. WLI influenced by fast dropping S&P 500?"

ECRI response tweet: "Latest drop in WLI was quite broad-based, not just about market prices."

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

Weekly Leading Index Growth Unchanged

Growth in a weekly leading index designed to forecast U.S. economic activity has marginally entered negative territory - now forecasting no growth over the next six months.

According to the Economic Cycle Research Institute, its weekly leading index declined from 1.0% (originally published as 1.0%) to -0.1%  - and, the level of the index declined from 134.3 (originally released last week as 134.4) to 131.9.

ECRI produces a monthly issued Coincident index. The October update for September shows the rate of economic growth remaining in a narrow range for the last four months:

U.S. Coincident Index

/images/z ecri_coin.png

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

U.S. Future Inflation Gauge

/images/z ecri_infl.PNG

U.S. FIG Ticks Down

U.S. inflationary pressures were lower in September, as the U.S. future inflation gauge fell to 105.0 from a downwardly revised August 105.9 reading, according to data released Friday morning by the Economic Cycle Research Institute.

ECRI produces a monthly Lagging index. The September's economy's rate of growth (released in October) very marginally declined but shows moderate growth.

U.S. Lagging Index

/images/z ecri_lag.PNG

source: ECRI

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