ECRI Weekly Leading Index indicator for future growth continues to weaken, turns negative

The six-month smoothed growth rate of the Weekly Leading Index (WLI) from the Economic Cycle Research Institute (ECRI) has weakened significantly over the past  twelve weeks (from +3.5% to -0.4%), although the actual level of the index is unchanged since last week and at the same level as the third week in June. A WLI of zero (0.0) would indicate an economy that is running at a steady growth rate, neither accelerating nor decelerating. A WLI fluctuating in a range from +1.5% to -1.5% would seem to be a relatively stable "Goldilocks" economy. Although the WLI smoothed growth rate is rather weak, it isn't showing any signs of the kind of persistent weakness (values more negative than -1.5% over a period of time) that would be seen in an economy that was slowing on its way into recession, but does look a lot like an economy moderating on its way to a relatively stable growth rate. If I were looking at this one indicator alone, I'd say that the Fed is succeeding at its goal of moderating the economy to a sustainable growth rate.

-- Jack Krupansky