24 February 2017: ECRI’s WLI Growth Index Moderate Slowing Of Rate of Growth Continues

ECRI’s WLI Growth Index which forecasts economic growth six months forward remains in positive territory for the 49th week – after spending the previous 35 consecutive weeks in negative territory. This is compared to RecessionAlerts similar weekly leading index.

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 Increased

The U.S. Weekly Leading Index (WLI) increased to 145.4 from 144.7. The growth rate ticked down to 10.2% from 10.5%.

To put the economy in perspective please see links below:

– read Lakshman Achuthan’s current interview on Elle.

– listen to Lakshman Achuthan’s interview on Finanacial Sense.

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 January index value (issued in February) shows the rate of economic growth unchanged.

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 January economy’s rate of growth (released in February) showed the rate of growth declined..

U.S. Lagging Index:

z ecri_lag.PNG

source: ECRI

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