Monday, April 27, 2009

ECRI Weekly Leading Index rises slightly and continues to show a hint of light at the end of the tunnel

The Weekly Leading Index (WLI) from the Economic Cycle Research Institute (ECRI) rose slightly by +0.07% vs. +-0.24% last week, and its annualized growth rate rose sharply from -19.7 to -18.6, 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 WLI growth rising to a 27-week high, U.S. economic growth, which is now at a record low, will soon begin to improve."

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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