ECRI Weekly Leading Index indicator rises moderately sharply but remains deep in recession territory

The Weekly Leading Index (WLI) from the Economic Cycle Research Institute (ECRI) rose moderately sharply by +0.89% vs. -0.48% last week, and its annualized growth rate rose moderately to -24.0 vs. -24.5 last week, but remains near its record low for its 60-year history of data of -30.2 for the week ended December 5, 2008, which is well below the flat line, suggesting that the economy will be struggling in the months ahead.

I do not have a quote from ECRI today, but I am sure that they would agree that despite this one-week improvement, the near and medium-term outlook remains quite gloomy.

The bottom line is that the ECRI WLI remains "flashing red." Alas, even the ECRI WLI is not a guaranteed, fool-proof economic indicator, especially when the data is mixed and there some amount of stimulus as well as potential problems in the pipeline.

My personal outlook is that: The recession of the U.S. economy that started in December 2007 and sharply accelerated in August 2008 currently shows no sign of an imminent end. There was a modest flattening of the WLI recently, but even that seems to have reversed. Still, the WLI has not set a new low for ten weeks now.

Although the current economic reports show significant weakness, there is also a vast amount of potential stimulus in the pipeline that could kick-start the economy within the next couple of months.

-- Jack Krupansky