Friday, March 20, 2009

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

The Weekly Leading Index (WLI) from the Economic Cycle Research Institute (ECRI) rose moderately by +0.51% vs. -0.26% last week, still only barely above its 14-year low, but its annualized growth rate was unchanged at -23.9, remaining near its record low for its 60-year history of data of -29.9 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, but we may see some stabilization as well.

According to ECRI, "WLI growth held steady in the latest week and is clearly holding above its December low, suggesting that U.S. economic growth will stabilize in coming months."

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. No imminent end, but there are some "hints" that some stabilization may be coming soon.

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


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