Sunday, August 29, 2010

USA Economic Weekly Leading Index: Double Dip Recession or Bottom Bouncing? (Chart)


Is the USA Economy Bottom Bouncing?

Weekly Leading Index: Double Dip Recession or Bottom Bouncing?

The media, economists, analysts, bloggers, et. al. have been noting this summer that the ECRI Weekly Leading Index for the USA economy dropped during this spring and summer. This, of course, is a negative trend and would ultimately be reflected in the USA GDP.

Below is a chart of the latest 12 months of ECRI Weekly Leading Index, from September 2009 through the latest week reported, August 20, 2010. As can be seen, the WLI peaked in late April 2010, declined significantly, and now appears to be bottom bouncing. Concomitant with this WLI decline has been the GDP growth slowing, as reviewed and charted here, in the previous post, "USA Q2 GDP Revised Downward to 1.6% (Chart)". As with the declining 2010 Q2 GDP of +1.6%, the WLI does appear to be at a crossroads: a continuing downwards trend towards zero growth, continued bottom bouncing,  or a bounce upwards from here?

The 13-week, 26-week, and 52-week moving averages of the WLI are 121.5, 126.2, and 127.7, respectively. The current WLI of 120.9, which is below all 3 of these moving averages. The WLI peaked at 134.7, for the week ended April 30, 2010. The plunge seen on the chart below then occurred.

USA Economy: Double Dip Recession or Bottom Bounce?

Data courtesy of ECRI

USA Q2 GDP Revised Downward to 1.6% (Chart) BoomDoomEconomy
S&P 500: Another Death Cross Arrives (Charts) MatrixMarkets
Economic Cycle Research Institute ECRI

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