Global| Jul 18 2005ECRI Leading Economic Index Improved Slightly
by:Tom Moeller
|in:Economy in Brief
Summary
Though the level of the leading index of the US economy published by the Economic Cycle Research Institute (ECRI) fell in the latest week, the 0.7% decline was not enough to undo the modest improvement in the leaders since late May. [...]
Though the level of the leading index of the US economy published by the Economic Cycle Research Institute (ECRI) fell in the latest week, the 0.7% decline was not enough to undo the modest improvement in the leaders since late May. Since then index's six month growth rate has risen to 1.2% from -0.3%.
During the last ten years there has been a 54% 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 67% during the last five years.
While growth in the leaders is down sharply from double digit rates logged during 2003, recession is not indicated. Negative growth in excess of -4% typically preceded past U.S. recessions.
Moreover, slower economic growth may not even be indicated by the more than 10 percentage point drop in the leaders' growth. During both the late 1980s and the late 1990s the leaders slowed by an even greater degree and little slowing in real GDP occurred.
Visit the Economic Cycle Research Institute for analysis of US and international business cycles.
| Economic Cycle Research Institute | 07/08/05 | 12/31/04 | Y/Y | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|
| Weekly Leading Index | 133.5 | 132.4 | 1.6% | 132.6 | 124.9 | 119.8 |
| 6 Month Growth Rate | 1.2% | 1.4% | 4.2% | 6.7% | 1.1% |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
More Economy in Brief
