05 December 2014: ECRI's WLI Improves Insignificantly and Remains in Contraction

December 12th, 2014
in econ_news, syndication

ECRI's WLI Growth Index improved insignificantly and has remained in negative territory for 8 weeks. This index is forecasting a slight business cycle contraction in 1Q2015. Obviously the markets do not share ECRI's view the business cycle is taking a downturn. ECRI also released their inflation guage this week and is discussed below.

Follow up:

Current ECRI WLI Level and Growth Index

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

Weekly Leading Index Growth Declines

Growth in a weekly leading index designed to forecast U.S. economic activity continues in negative territory - statistically forecasting a slight business cycle contraction in the next six months.

According to the Economic Cycle Research Institute, its weekly leading growth index slightly improved from -2.4% (originally published as -2.3%) to -2.3%  - but, the level of the index degraded from 132.5 (originally released last week as 132.5) to 132.3.

ECRI produces a monthly issued Coincident index. The October update for October (reported in November) shows the rate of economic growth remaining in a narrow range for the last five 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. Future Inflation Gauge Slips

U.S. inflationary pressures were lower in November, as the U.S. future inflation gauge fell to 104.7 from a revised October 105.7 reading, first reported as 105.9, according to data released Friday morning by the Economic Cycle Research Institute.

"While dipping in its latest reading, the USFIG remains near its summer high," ECRI Chief Operations Officer Lakshman Achuthan said in a release. "Thus, underlying inflation pressures, while still simmering, have cooled a little."

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

U.S. Lagging Index

/images/z ecri_lag.PNG

source: ECRI

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