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posted on 19 August 2016

12 August 2016: ECRI's WLI Growth Index Essentially Unchanged

ECRI's WLI Growth Index which forecasts economic growth six months forward was statisically unchanged and remains in positive territory for the 21th week - after spending the previous 35 consecutive weeks in negative territory. This is compared to RecessionAlerts similar index.ECRI also released their coincident and lagging indices this week.

Current ECRI WLI Level and Growth Index:

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

U.S. Weekly Leading Index Ticked Down

The U.S. Weekly Leading Index (WLI) ticked down to 137.8 from 137.9. The growth rate edged down to 8.4% from 8.7%.

The U.S. economic slowdown is set to continue, as the latest WLI upturn is not sufficiently pronounced, pervasive and persistent - the three P's - to qualify as a true cyclical upturn. Rather, it partly reflects the run-up in the markets as the early-2016 recession fears among the consensus faded, with the Fed backing off its rate hike plans, the dollar weakening, and some data beating significantly lowered expectations.

To put the economy in perspective please see links below:

- watch Lakshman Achuthan's interview on Bloomberg TV.

- read ECRI's "Stagflation Lite Getting Harder to Ignore."

For a closer look at recent moves in the U.S. Weekly Leading Index, see the chart below:

Comparison to RecessionAlert Weekly Indicator

RecessionAlert also produces a weekly foreward indicator using different pulse points tha ECRI's WLI. Here is a graph from which compares the two indices.

Coincident Index:

ECRI produces a monthly coincident index - a positive number shows economic expansion. The July index value (issued in August) shows an insignificant improvement in economic growth.

z ecri_coin.png

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

U.S. Future Inflation Gauge:

z ecri_infl.PNG

U.S. Future Inflation Gauge Rises

U.S. inflationary pressures were up in July, as the U.S. future inflation gauge gained to 112.6 from an unrevised 111.4 reading in June, according to data released Friday morning by the Economic Cycle Research Institute.

"The USFIG rose again to a 97-month high in July," ECRI Chief Operations Officer Lakshman Achuthan said in a release. "Thus, cyclical inflation pressures are increasing inexorably."

ECRI produces a monthly Lagging index. The July's economy's rate of growth (released in August) showed the rate of growth insignificantly improved..

U.S. Lagging Index:

z ecri_lag.PNG

source: ECRI

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