Today the Economic Cycle Research Institute, or ECRI an independent forecasting group based in New York, said its Weekly Leading Index (WLI) fell to its lowest level in its six decade history. The WLI and its growth rate are designed to predict future turning points in the business cycle (recessions and recoveries.)
Today ECRI said its WLI fell to 112.9 for the period ending October 24, 2008. Last week WLI was 114.0.
The WLI growth rate fell to -21.9%, down from -19.3% last week.
Commenting on the data, Lakshman Achuthan, managing director at ECRI said
The WLI growth rate fell to -21.9%, down from -19.3% last week.
Commenting on the data, Lakshman Achuthan, managing director at ECRI said
"With WLI growth plummeting to the lowest reading registered in its six-decade history, the outlook for the economy has darkened dramatically."
Is the Recession two years old now?
I explore that idea in my upcoming article "Is the Recession In Its Second Year Now?"
I explore that idea in my upcoming article "Is the Recession In Its Second Year Now?"
More ECRI Articles:
- October 30, 2008: ECRI Warned Us; We Are In A Recession Now
- March 28, 2008: ECRI Calls it "A Recession of Choice"
- January 25, 2008: "ECRI Says There Is A Window of Opportunity for the US Economy"
- January 05, 2008: "ECRI Says Fed Has Room To Cut Rates Despite Fears of Inflation"
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kirklindstrom.com
Prior to today's number, what was the lowest reading and how far back does the data go?
ReplyDeleteThanks
The lowest growth rate reading before the week-ending 10/24/08 was 12/27/74 (x-mas of 1974) when it was -19.8%.
ReplyDeleteFYI -- this data is available to all at http://www.businesscycle.com/resources/
The WLI series on a weekly basis begins in 1967, and on a monthly basis in 1949.
Lakshman
This is why I think the real market lows will not come until 2009 when it is clear that the recession will be severe. That realization was not baked in the recent lows.
ReplyDeleteNow, one could argue that we've been IN a recession for a year already and we're seeing the worst of it now. That very well could be but the WLI is a LEADING indicator and is pointing to much more pain in the future.
The process of global deleveraging will be long and painful I'm afraid.
Let's just hope we can at get a nice bear market rally before then!
ps: Sorry for pre-empting your response Kirk but I just couldn't help myself. :)
>>Lakshman Achuthan said...
ReplyDeleteThe lowest growth rate reading before the week-ending 10/24/08 was 12/27/74 (x-mas of 1974) when it was -19.8%. <<
Thanks for the information Lakshman.