Friday, May 29, 2009

ECRI Weekly Leading Index rises moderately sharply strongly suggesting that an end to the U.S. recession is now in clear sight

The Weekly Leading Index (WLI) from the Economic Cycle Research Institute (ECRI) rose moderately by +0.81% vs. +0.03% last week, and its annualized growth rate rose sharply from -11.5 to -9.3, well 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, its distinct upturn does strongly suggest that recovery is on the way.

According to ECRI, "With WLI growth climbing by 20 percentage points in 26 weeks, the economic growth outlook is getting steadily brighter."

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 continue to show significant weakness, there is also a vast amount of potential stimulus (especially from the Federal Reserve) 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 further employment losses even as recovery is underway.

-- Jack Krupansky


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