Latest ECRI Weekly Leading Index Readings

HenryTo

For some reason, the ECRI doesn't publish weekly press releases anymore on its Weekly Leading Index readings - although one can still get access to the weekly readings via a (free) registration.

For the week ending June 17, 2005, the Weekly Leading Index level is at 133.4 - a growth rate of 0.2% from last year. I will try to update this thread every week from now on.

Hope everyone is having a great Sunday!

Henry

dash · Veteran Poster Joined: 12 Apr 2005 Posts: 472

It will be interesting to see next Friday's number. On another note it seems Buffett's comment about there not being a 'soft landing' has been misinterpreted. A lot of people have assumed he was talking about this economic cycle, more specifically this year. That was not the case:

rffrydr · Posted: Fri Mar 02, 2007 12:50 pm Post subject:

It's not about the economy--as an old saying, almost, goes.
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HenryTo · Posted: Fri Mar 02, 2007 12:45 pm Post subject:

Hi Guys,

Just to clarify, the latest ECRI WLI reading uses numbers leading up to 2/23/07. We won't see the recent stock market action incorporated into the numbers until next Friday.

That being said, I think this reading will remain relatively strong - definitely not a hard landing.

Best regards,

Henry

nodoodahs · Moderator Joined: 06 May 2005 Posts: 2229

I think the fear was everywhere so pervasive that it just needed a catalyst for a little "fear enema."
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dash · Veteran Poster Joined: 12 Apr 2005 Posts: 472

So according to ECRI still no sign of a hard landing. Last year the consensus was that were headed for a 4-year low. If you'd googled 4-year cycle low the peak in articles written about it probably coincided with the June/July lows.

Now everyone's talking about subprime, a repricing of risk, and how weakness in housing is finally spreading to the consumer and the economy at large. The market has once again begun to price a rate cut in July, presumably on the expectation that there will be a hard landing.

My feeling is that prior to this week's drop, one of the reasons the market was struggling to break out of its November - February range was because there was no fear and that it was overbought. The percentage of stocks trading above their 20DMA on the S&P was above 80% until Tuesday. It's just very difficult for it to rally when it's that overbought. Now that number is 20%. So now there's a lot more fear and the S&P is short-term oversold. Perhaps it needs to get medium-term oversold (% of stocks above their 50DMA has dropped from >80% to 41% and it may need to get <20% as it did in June/July 2006), before we can start another leg up?

HenryTo · Posted: Fri Mar 02, 2007 9:55 am Post subject:

Week ending 2/23/2007:

WLI = 140.30
Annual ROC = 3.2%

No revisions to last week's data. ECRI Future Inflation Gauge data (which is a monthly data point) will be released next week.

HenryTo · Posted: Sun Feb 25, 2007 2:46 am Post subject:

Week ending 2/16/2007:

WLI = 139.3
Annual ROC = 3.4%

No revisions to last week's data.

Kirk · Newbie Joined: 05 Jun 2006 Posts: 11 Location: California

dash · Veteran Poster Joined: 12 Apr 2005 Posts: 472

Kirk:

Kirk · Newbie Joined: 05 Jun 2006 Posts: 11 Location: California

You're welcome Henry Razz

Here is the chart for today's data
ECRI WLI vs GDP Growth - Chart for 2/16/07
http://www.investorhives.com/msgd.php?msg_id=378

It shows a pretty sharp turn down in WLI growth, not a blip...
I like what Lakshman calls it: "a Goldilocks economy with a soft spot."
The data I have says a turn-down like this in WLI is followed by a weaker quarter... which is the quarter we are now in... so maybe 2 to 3.4% rather than 3.5% GDP growth just as Q2-'05 only saw a slight slowing in GDP when the WLI turned down as shown on the graph.
Have a good weekend
Very Happy

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HenryTo · Posted: Fri Feb 16, 2007 2:38 pm Post subject:

Thanks Kirk.

Following is the most recent press release from ECRI on their WLI - along with its latest readings:
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16-February-2007

NEW YORK, Feb 16 (Reuters) - A gauge of future U.S. economic growth dipped in the latest week on higher jobless claims and slower housing activity, while its annualized rate of growth also fell, a research group said on Friday.

The Economic Cycle Research Institute, an independent forecasting group, said its Weekly Leading Index fell to 138.9 in the week ending Feb. 9 from an upwardly revised 140.2 in the prior week.

Annualized growth rate fell to 3.5 percent from 4.3 percent in the previous period, also revised up.

"Though WLI growth has eased for two weeks it remains well above last August's low, indicating a positive U.S. growth outlook," said Lakshman Achuthan, managing director at ECRI.

"With the industrial slowdown continuing, it may be that near-term we will have a Goldilocks economy with a soft spot."

The fall in the index was partly offset by higher stock prices and lower interest rates, Achuthan said.

Kirk · Newbie Joined: 05 Jun 2006 Posts: 11 Location: California

Chart of ECRI WLI vs GDP Growth http://www.investorhives.com/msgd.php?msg_id=346
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HenryTo · Posted: Sat Feb 10, 2007 2:02 am Post subject:

Week ending 2/2/2007:

WLI = 140.0
Annual ROC = 4.0%

Last week's WLI reading was revised from 140.2 to 140.1.

Kirk · Newbie Joined: 05 Jun 2006 Posts: 11 Location: California

You're welcome Henry

I just posted the latest FIG data too
http://investment.suite101.com/blog.cfm/ecris_january_2007_fig_or

It has great news "U.S. inflation pressures fell in January due mainly to disinflationary moves in measures of jobs, home loans, interest rates and vendor performance."

Lower inflation means more money for consumers to spend so Taylor could be right.

I'll update the ECRI WLI chart tonight or tomorrow with this week's data and send it to you if you want to share it with your readers. I'm still trying to figure out how to show the FIG data with interest rates in a graphical form that makes sense. When I get that figured out, we can share it at our various web sites and newsletter for others to comment on.

I've been very impressed with ECRI and I believe Greenspan and now Bernanke used their data to stop raising rates when some wanted them to continue. Likewise, the WLI turned up some time ago so there was no pressure, as I saw it, for the Fed to cut rates to save the economy. As it turns out, the Fed and ECRI seem to have done very, very well.

Now what team needs to win Sunday for the market to go up? Laughing

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HenryTo · Posted: Fri Feb 02, 2007 12:22 pm Post subject:

Thanks, Kirk. I like the chart!

In other news, following is the latest reading for the period ending January 26, 2007:

Week ending 1/26/2007:

WLI = 140.2
Annual ROC = 4.7%

WLI growth now at a 51-week high. In our CFA LA Annual Forecast Dinner last night, John Taylor (of the "Taylor Rule") believes that consensus for a growth below trend this year is wrong and that the economy should grow "at trend" - i.e. he sees real GDP growth of 3% to 3.5% this year. Abby Joseph Cohen and Paul McCulley both disagree - with Mr. McCulley being slightly more bearish than Abby. Both of them say the economy will continue to grow this year, but below trend.

No revisions to last week's numbers.