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Economy in Brief

ECRI Leading Index: Momentum Strength Diminished
by Tom Moeller March 20, 2006

The weekly leading index of the US economy published by the Economic Cycle Research Institute (ECRI) slipped 0.1% last week. The decline was the fifth in the last six weeks and lowered the index's six month growth rate to 3.0% from an early February high of 5.1%.

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 71% during the last five years.

The very recent deceleration in the leaders' growth follows improvement early this year. That slowdown mirrors the pattern of slightly slower growth in the leading series from the Conference Board and the OECD.

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Economic Cycle Research Institute  3/10/06 12/30/05 Y/Y 2005 2004 2003
Weekly Leading Index 136.8 135.7 0.8% 134.5 132.6 124.9
   6 Month Growth Rate 3.0% 3.1%   1.9% 4.2% 6.7%
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