ECRI Weekly Leading Index rises, again

Despite the fact that just this past Monday ECRI was publically reiterating its late-September call that the U.S. economy is "tipping into recession", their Weekly Leading Index has inched higher, for the fourth week in a row, and their smoothed growth rate has also moved higher for the second week in a row. Granted, a month of improvement does not mark a reliable indication of a change in trend, but we can certainly say that a new recession is still not apparent. That said, I'll stick with my forecast that we will see some modest growth in the fall and maybe some weakness in the winter and spring, but by late summer we'll be back in the black. So, a recession is not here right now, may come in a few months, but will be short and shallow. That's my call, for now, subject to change, on a moment's notice. I'll continue to defer to ECRI, but I'm not going to bet the farm that there will be a steep recession over the next twelve months.

 

Meanwhile, we're waiting to see how Greece and Italy shake out in the coming months, not to mention the U.S. joint congressional debt super-committee which has a deadline 12 days away. Personally, I think all of these things will get worked out in some fashion, albeit with lots of drama and market volatility in the interim.

 

Real investors should focus on long-term economic and business fundamentals, not the panicky pronouncements of short-term traders and speculators.

-- Jack Krupansky