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Economy in Brief

ECRI U.S. Leading Indicators Soft
by Tom Moeller August 23, 2004

Though the Weekly Leading Index of the US economy published by the Economic Cycle Research Institute (ECRI) ticked 0.2% higher in the latest week, its growth rate slowed to 0.0% versus double digit rates of growth into this past Spring.

The weekly rise was due to higher mortgage applications and lower jobless claims which offset a lower money supply, but the trend in mortgage apps and money growth has been soft.

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.

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 08/13/04 08/06/04 Growth Rate 2003 2002 2001
Weekly 131.7 131.4 3.6% 6.5% 1.1% -5.3%
  July June        
Monthly 131.7 132.0 1.1%      
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