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posted on 03 February 2017

27 January 2017: ECRI's WLI Growth Index Insignificantly Declines

ECRI's WLI Growth Index which forecasts economic growth six months forward remains in positive territory for the 45th week - after spending the previous 35 consecutive weeks in negative territory. This is compared to RecessionAlerts similar weekly leading index. ECRI also released their inflation indicator this week.

Analyst Opinion of the trends of the weekly leading indices

Both ECRI's and RecessionAlerts indicies are indicating moderate growth six months from today. Both indices are in a growth cycle with both indices improving. Still, they are indicating conditions 6 months from today may be somewhat better than today.

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. WLI Unchanged

The U.S. Weekly Leading Index (WLI) unchanged at 145.1. The growth rate ticked down to 11.8% from 11.9%.



To put the economy in perspective please see links below:

- read ECRI's "Future Inflation Gauge Leads Inflation Expectations".

- read ECRI's "Women's Labor Force Participation Down, Capping Jobs & Economic Growth".

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 dshort.com which compares the two indices. Both indices are showing nearly the same rate of growth.

Coincident Index:

ECRI produces a monthly coincident index - a positive number shows economic expansion. The December index value (issued in January) shows a small decline in the rate of 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

Future Inflation Gauge Leads Inflation Expectations

ECRI's U.S. Future Inflation Gauge (USFIG) turned up ahead of inflation expectations, and remains in a cyclical upturn.

The chart shows that the USFIG (red line at the top) was already in a strong upturn last July, so even though market inflation expectations (blue line at the bottom) was way down, we knew that a major upshift in the inflation cycle was at hand.

Of course, since then, inflation expectations have risen significantly.

Since the summer we have had a U.S. inflation upturn call, and a global reflation call, based on 11 international FIGs (see presentation slides).

Combining that with our earlier growth rate cycle upturn call for the U.S., it's clear that, on a cyclical basis, we are at a very different place than a year ago.

ECRI produces a monthly Lagging index. The December economy's rate of growth (released in January) showed the rate of growth marginally improved.

U.S. Lagging Index:

z ecri_lag.PNG

source: ECRI



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