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Sunday, September 09, 2007

Chart of ECRI's WLI Growth Rate vs US GDP: 09/09/07


The growth rate of WLI is at a 43-week low. This decline has been signaling that we should expect the economy to slow and not repeat Q2's 4.0% GDP growth. The fear now is an external shock, such as a 9/11/01 like attack, could send the economy into a recession.

With ECRI's FIG at a 27-month low (see Sept 7th Jobs Report & ECRI's WLI & FIG) the Federal reserve has done its job to reduce inflation pressure and they should cut the Fed Funds Rate at their next meeting if not before.

It usually takes months for Fed Funds rate changes to show in the GDP numbers, but the signal to the markets they are on top of the situation could ease fears and help insure a soft landing.

  • ECRI is Economic Cycle Research Institute
  • FIG is Future Inflation Growth
  • WLI is Weekly Leading Index
I cover what this chart means to the stock market in "Kirk's Investment Newsletter."

ECRI’s Recommended Books:



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4 comments:

  1. what happened to the Brinker discussion forum?

    ReplyDelete
  2. Look for instrutions for an invitation to the facebook discussion forum with a Brinker sub topic at the Bob Brinker Fan Club

    If you want to remain anonymous then make comments on articles at the Bob Brinker Fan Club Blog

    ReplyDelete
  3. And what happened to the ECRI Data & Forecast forum at investmentsuite?
    BR

    ReplyDelete
  4. I am not writing for Suite101 anymore.

    Without a moderator, they shut down the discussions in my old topic.

    We have a NEW discussion group at facebook.

    Look under "Special Links" under my windsurfing picture for a link to request an invitation to the facebook discussion group "Investing for the Long Term."

    ReplyDelete

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