Friday, April 17, 2009

ECRI Weekly Leading Index falls modestly but still shows a hint of light at the end of the tunnel

The Weekly Leading Index (WLI) from the Economic Cycle Research Institute (ECRI) fell modestly by -0.18% vs. +0.99% last week, but its annualized growth rate rose sharply from -20.9 to -19.7, moderately above its record low for its 60-year history of data of -29.7 for the week ended December 5, 2008, and although it remains well below the flat line, the distinct upturn does strongly suggest that recovery is on the way.

According to ECRI, "With the upturn in Weekly Leading Index growth continuing for over five months now, growth in U.S. economic activity will begin to improve in short order."

My personal outlook is that: The recession of the U.S. economy that started in December 2007 and sharply accelerated in August 2008 finally looks as if recovery may be underway within the next few months.

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. Please keep in mind that employment is not a leading indicator, so we could continue to see employment losses even as recovery is underway.

-- Jack Krupansky

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