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Economy in Brief

ECRI Leading Indicators Slow
by Tom Moeller June 21, 2004

Decline through much of last month in the Weekly Leading Index of the US economy published by the Economic Cycle Research Institute (ECRI) was followed by a gain in the latest period.

The declines lowered the six-month growth rate in the index to 3.6% from double digit growth that prevailed through much of 2H03 and into 1Q04.

During the last ten years there has been a 68% correlation between the six-month growth in ECRI's leading index of the US economy and two quarter growth in real GDP.

Construction of the ECRI Leading Index differs from the Index of Leading Economic Indicators published by the Conference Board. There has been a 70% correlation between the y/y percent change in the two series over the last 10 years.

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 median lead of the ECRI index at business cycle peaks has been 10.5 months and at cycle troughs 3.0 months.

For more on ECRI and the Weekly Leading Index go to this link.

ECRI Leading Index 06/11/04 06/04/04 Growth Rate 2003 2002 2001
Weekly 132.7 132.1 3.6% 6.6% 1.1% -5.3%
  May April        
Monthly 133.6 134.6 7.1%      
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