ECRI Weekly Leading Index Pointing Toward a Double-Dip
Those looking for evidence of an upcoming double dip recession may have found their canary. The Economic Cycle Research Institute’s (ECRI) Weekly Leading Index is pointing to serious trouble ahead for U.S. economy with the index falling seven consecutive weeks moving into negative territory. According to Laksham Achutan, managing direction of ECRI, “The continuing decline in [the index’s] growth rate to a 56-week low underscores the inevitability of the slowdown.” Looking at the historical relationship between growth and the ECRI’s index, Laksham’s views may not be unfounded. Over the past several years the index has done a fairly robust job at predicting turns in the U.S. economy, and if you believe the current trend things are about to get much worse. Unlike the Conference Board’s Leading Economic Indicator Index the ECRI’s Weekly Leading Index is timelier released on a weekly basis with only a one week lag. The next release will be this coming Friday.
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