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Economy in Brief

ECRI Leading Index Suggests Economic Growth
by Tom Moeller August 29, 2005

The leading index of the US economy published weekly by the Economic Cycle Research Institute (ECRI) stuttered in the last two periods but failed to reverse the sharp improvement in the measure since the low this past May.

Since the low, growth in the leaders has improved to 3.2% after having been slightly negative for a short period.

During the last ten years there has been a 53% correlation between the change in the weekly leading index and the change in US real GDP growth during the following quarter. The correlation has risen to 72% during the last five years.

"But if recessions have historically been so hard to predict, why should you listen to us?" This quotefrom the book Beating the Business Cycle points out the difficulty of forecasting, especially when it concerns the future.

"To monitor just the U.S. economy, ECRI uses an array of 19 specialized leading indexes in the context of an “economic cycle cube” covering various sectors and aspects of the economy."

Visit the Economic Cycle Research Institute for analysis of US and international business cycles.

Fed Chairman Greenspan's closing remarks from the Jackson Hole, Wyoming symposium can be found here.

Economic Cycle Research Institute  08/19/05 12/31/04 Y/Y 2004 2003 2002
Weekly Leading Index 135.4 132.5 1.4% 132.6 124.9 119.8
   6 Month Growth Rate 3.2% 1.6%   4.2% 6.7% 1.1%
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