19 December 2014: ECRI's WLI Declines Again Marginally and Remains in Contraction

December 26th, 2014
in econ_news, syndication

ECRI's WLI Growth Index declined and has remained in negative territory for 10 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 coincident and lagging indices 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 degraded from -3.1% (originally published as -3.1%) to -3.3%  - but, the level of the index degraded from 131.1 (originally released last week as 131.1) to 130.9.

ECRI produces a monthly issued Coincident index. The November update (reported in December) shows the rate of economic growth remaining in a narrow range for the last six 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 November's economy's rate of growth (released in December)  marginally declined but shows moderate growth.

U.S. Lagging Index

/images/z ecri_lag.PNG

source: ECRI

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