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The Weekly Leading Index of the US economy published by the Economic
Cycle Research Institute (ECRI) rose last week for the fourth period in
the last five. The 0.4% w/w rise eased the decline in the index's
smoothed six-month growth rate to -0.7% from -1.6% late last month.
· Successive positive growth in the weekly index as recently tallied occurred last this past March after which the index's forward momentum eased, foreshadowing a slowdown in real GDP growth into the 3-4% range from the 4-7% range.
· Past recessionary periods in the US economy were signaled by negative growth in the ECRI Leading Index in the -5 to -10% range. During the last ten years there has been a 69% correlation between the six-month growth in the ECRI leading index of the US economy and two quarter growth in real GDP.
· The components of the ECRI weekly leading index are money supply plus stock & bond mutual funds, the JOC-ECRI industrial materials price index, mortgage applications, bond quality spreads, stock prices, bond yields, and initial jobless insurance claims.
· The ECRI Leading Index's recent pattern generally mirrors the Conference Board's Index of Leading Economic Indicators, with a slight lead. Construction of the ECRI Leading Index differs from the Conference Board Index but there has been a 70% correlation between the y/y percent change in the two series over the last 10 years.
· The median lead of the ECRI index at business cycle peaks has been 10.5 months and at cycle troughs 3.0 months.
· The latest from ECRI is available here.