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

[Kirk]

Either Lakshman or Melinda usually post the weekly ECRI press release here: ECRI Data & Forecast

Here is what they posted last week:

58. January 26, 2007 8:08 AM
» ECRI - WLI slips, GR up

Gauge of U.S. economy lower in latest week - ECRI

Fri Jan 26, 2007 10:30 AM ET

NEW YORK, Jan 26 (Reuters) - A gauge of future U.S. economic growth was lower in the latest week on the back of higher interest rates, and its growth index reached a 50-week high, a research group said on Friday.

The Economic Cycle Research Institute, an independent forecasting group, said its Weekly Leading Index slipped to 139.2 in the week ending Jan. 19 from 140.8 in the prior week.

Annualized growth rate was up to 4.5 percent from 4.4 percent in the previous period.

"WLI growth has climbed steadily since the summer and is now at a 50-week high, thus the U.S. economic growth outlook continues to improve," said Melinda Hubman, research associate at ECRI.

The drop in the index was offset by higher stocks and commodity prices, Hubman said.

Occasionally the WLI level and growth rate can move in different directions, because the latter is derived from a four-week moving average.

I have a pdf version of the WLI chart vs quarterly GDP growth I uploaded here
http://www.investorhives.com/msgd.php?msg_id=346
It doesn't display the pdf graph until you click the link there, but then you can save and/or print the graph.
_________________
Kirk out
http://www.theretirementadvisor.net
http://kirklindstrom.blogspot.com/

[HenryTo]

Week ending 1/19/2007:

WLI = 139.2
Annual ROC = 4.5%

WLI growth now at a 50-week high. Again, no recession here.

No revisions to last week's numbers.

[HenryTo]

Week ending 1/12/2007:

WLI = 140.8
Annual ROC = 4.4%

Last week's WLI revised to 141.7, with annual ROC revised to 4.1%.

[HenryTo]

Week ending 1/5/2007:

WLI = 141.8
Annual ROC = 4.0%

Last week's WLI revised to 139.2, but annual ROC remained the same. WLI Annual ROC just moved to a 47-week high. No recession here.

[HenryTo]

Week ending 12/29/2006:

WLI = 139.0
Annual ROC = 3.7%

No revisions to last week's numbers.

[HenryTo]

Two-part interview on the ECRI's outlook for 2007. Talks about U.S. economic growth, the U.S. Dollar, global industrial production slowdown, and finally housing prices.

http://www.businesscycle.com/news/1092/

[HenryTo]

Week ending 12/22/2006:

WLI = 138.5
Annual ROC = 3.8%

No revisions to last week's numbers.

[HenryTo]

Week ending 12/15/2006:

WLI = 139.7
Annual ROC = 3.4%

Last week's ROC remains at 2.8%. WLI growth now at a 30-week high. Not only are the odds of a recession now virtually nil, but the economy is now starting to gradually reaccelerate.

[HenryTo]

Week ending 12/8/2006:

WLI = 140.8
Annual ROC = 2.8%

Last week's ROC revised to 1.9%. WLI growth now at a 29-week high. Again, no recession here.

[HenryTo]

Week ending 12/1/2006:

WLI = 138.7
Annual ROC = 1.8%

No revision to last week's ROC. WLI growth now at a 26-week high. No recession here.

[HenryTo]

Week ending 11/24/2006:

WLI = 137.1
Annual ROC = 1.5%

Last week's ROC was revised to 1.4%.

[HenryTo]

Week ending 11/17/2006:

WLI = 138.2
Annual ROC = 1.6%

Last week's ROC was revised to 1.1%.

Recent press release from the ECRI on their WLI - with a little bit of advertisement at the end:
--------------------------------------------------------------------------------
20-November-2006

NEW YORK (Dow Jones)--The index of leading indicators increased for the second month in a row in October, a tentative sign of better economic times ahead.

Moreover, the Economic Cycle Research Institute's weekly leading index – which gives a more up-to-date view - moved further into positive territory in the week ended Nov. 10, for the second week in a row.

"We've still got lackluster growth between now and early 2007, but the risk of recession may be receding," said Lakshman Achuthan, managing director of ECRI in New York.

If Achuthan is correct and there is a fading chance of a recession and lessened threat from inflation, then he could also be right when he states that "the Federal Reserve may stay on hold for a lot longer than people think."

The Changed Nature Of Leading Indicators

Composite leading indicator indexes have fallen into some disfavor with financial markets, possibly for two reasons: (1) markets are more focussed on specific sectors that may be the chief sources of economic weakness – currently housing market indicators, at other times manufacturing indicators; and (2) leading indicator indexes are most valuable at signaling cyclical turning points and no such indication has been given recently.

To be sure, the Conference Board index has stuttered in recent months with little clear trend. Over the six months from April through October the index has drifted down by just 0.2%, hardly changed at all.

In October, the index rose by 0.2%, with six out of the 10 indicators up, led by a 0.43 percentage point contribution from real money supply, reflecting both an increase in nominal money supply and a decline in the consumer price index. Based on the decline in the CPI, the Conference Board presumed a decline in the personal consumption expenditures price index which it uses to deflate money supply. Offsetting some of the increase were declines, including a 0.27 percentage point decline in vendor performance and a 0.17 point decline in building permits.

At the same time there were revisions, including a fairly large one to September (now up 0.4% instead of the initially reported 0.1% gain).

Indeed, the tendency for frequent and fairly large revisions may be another reason for the lessened market interest in the leading index. (Three of the components - manufacturers' new orders for consumer goods and materials, manufacturers' new orders for nondefense capital goods and the real money supply - are not fully known and, so, the Conference Board makes imputations for them.)

ECRI's Index More Timely, Less Revised


ECRI's weekly leading index has the advantages of being more timely than the monthly Conference Board indicator. Its seven components are available at time of publication, so, there's less guesswork and fewer revisions.

The favored measure that the ECRI analysts look at to evaluate the index is not the index level itself or its month-to-month change, but rather the change in the index relative to its 52-week moving average.

On that basis, the WLI reached a 2006 peak of +5.0% in the week ended Feb. 10, drifted lower until it moved into negative territory in the week ended July 28, where it stayed for 14 weeks before showing a 0.6% increase relative to the 52-week average in the week ended Nov. 3 and an increase of 1.2% in the week ended Nov. 10.

Just as the early February peak signaled the drift through slower growth in the second and third quarters, the move back into positive territory - if it continues - could signal a return to more trend-like growth by the second quarter of 2007, according to Achuthan.

"The improvement in the WLI is pervasive, it's not just one component," said Achuthan, who looks for signals that are pronounced, prolonged and pervasive. "It takes a while before we can tell for sure, but it's beginning to look like there's something afoot. The WLI is like a one-armed economist."

That seems to mean that the signal is pretty clear.
Privacy Policy Terms of Service

[HenryTo]

Week ending 11/10/2006:

WLI = 138.5
Annual ROC = 1.2%

Last week's annual ROC was revised from 0.3% to 0.6%. According to the ECRI, the U.S. economy is now showing some signs of life going forward.

[HenryTo]

Week ending 11/3/2006:

WLI = 137.5
Annual ROC = 0.3%

WLI annual rate of change finally in positive territory.

[HenryTo]

Week ending 10/27/2006:

WLI = 136.1
Annual ROC = -0.3%