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Economy in Brief
NABE Projects Firm Growth in 2022, as in 2021
The NABE expects 4.0% real GDP growth in 2022 following a 4.8% rise during 2021...
U.S. Construction Spending Strengthens Again in January
Building activity continues to strengthen...
Manufacturing PMIs Are Strengthening More in the Developed World
PMIs largely are improving in February...
U.S. Personal Income & Spending Surge With Stimulus Payments in January
Personal income jumped 10.0% (13.1% y/y) last month...
Chicago Business Barometer Declines Sharply in February
The ISM-Chicago Purchasing Managers Business Barometer fell 4.3 points in February to 59.5...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller September 19, 2005
The leading index of the US economy published weekly by the Economic Cycle Research Institute (ECRI) fell during four of the last five weeks. The latest 0.4% w/w decline reflected, in part, the sharp rise in initial claims for unemployment insurance due to Hurricane Katrina.
These weekly declines, however, are modest compared to past periods when economic recession was indicated. The six month growth rate of the leading index has held at roughly 3%, still up from the June low of -0.6% and from the -5% to -7% growth rates which preceded the last recession.
During the last ten years there has been a 53% correlation between the change in the weekly leading index and US real GDP growth during the following quarter. The correlation has risen to 76% during the last five years.
ECRI's research director indicated that "The economy was at a phase of the business cycle where it was relatively resilient to any type of shock. The reality is that the potency of a shock, how much influence it can have, really depends on where we are in the business cycle."
The accompanying charts indicate some of that resiliency. Recent US economic growth has been less due to consumer spending & housing and more due to exports & business fixed investment. Moreover, core price inflation recently has been low and declining rather than high and rising.
Visit the Economic Cycle Research Institute for analysis of US and international business cycles.
Economic Cycle Research Institute | 09/09/05 | 12/31/04 | Y/Y | 2004 | 2003 | 2002 |
---|---|---|---|---|---|---|
Weekly Leading Index | 135.2 | 135.8 | 2.9% | 132.6 | 124.9 | 119.8 |
6 Month Growth Rate | 2.9% | 3.1% | 4.2% | 6.7% | 1.1% |