Friday, September 17, 2010

USA Weekly Leading Index at 14 Week High (Charts) *Annualized Growth Rate -9.2%*

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Weekly Leading Index: Is the USA Economy Bottom Bouncing?


USA Economic Weekly Leading Index at 14 Week High

Overview The USA Economic Weekly Leading Index rose to a 14 week high of 122.6 for the week ended September 10, 2010. This is the highest the WLI has been since 122.7 for the week ended June 14. This is an increase of +0.6 from the previous week WLI of 122.0.

Cycle History The WLI for the week ended September 10 is down -12.1 and -8.9% from the peak of 134.7 for the week ended April 3, 2010. The current WLI is up +2.2 and +1.8% from the bottom of 120.4 for the week ended July 16, 2010.

Trend The WLI has increased for two consecutive weeks now. The WLI of 122.6 is above the 13-week moving average of  121.2 for the second consecutive week. The WLI continues below the 26-week moving average of 125.2 for the 18th consecutive week. The WLI continues below the 52-week moving average of 127.4.

Chart (Weekly Leading Index) Below is a chart of the latest 52 weeks (1 year) of the ECRI Weekly Leading Index, from the week ended September 18, 2009 through the latest week reported, September 10, 2010. As can be seen, the WLI peaked in late April 2010, declined significantly, and now appears to be bottom bouncing. The latest WLI, a 14 week high of 122.6, could potentially be a change in trend to the upside. Concomitant with the WLI decline this summer has been USA GDP growth being revised downwards for the second half of 2010.




USA WLI Annualized Growth Rate at 11 Week High

Overview The WLI Annualized Growth Rate (AGR) was -9.2% for the week ended September 10, 2010, an 11 week high, the second consecutive weekly increase, and a rise of an impressive +0.9. This is the largest weekly increase since the week ended October 2, 2009, in 50 weeks!

Cycle History The AGR for the week ended September 10 is down -37.0 and -133.1% from the peak of +27.8% for the week ended October 9, 20009. The current AGR is up +1.8 and +16.4% from the bottom of -11.0% for the week ended July 23, 2010.

Trend The AGR has increased for two consecutive weeks and 5 of the last 6 weeks. This was after 12 consecutive weekly declines from the week ended May 7, 2010 to the week ended July 23, 2010.

Chart (Annualized Growth Rate) Below is a chart of the latest 52 weeks (1 year) of the ECRI WLI Annualized Growth Rate, from the week ended September 18, 2009 through the latest week reported, September 10, 2010. As can be seen, the annualized growth rate peaked at +27.8% in early October 2009 and began a decline with intermittent leveling off. A negative growth % was reached in early June 2010 and the rate has remained negative since.



Commentary The Weekly Leading Index projects forward approximately 6 months and the Annualized Growth Rate is relative to the WLI. That is, the overall higher WLI in 2010 mitigates some of the recently negative AGI. The WLI is off the bottom reached in mid-July and is in a recent uptrend. The AGR is also off the bottom reached in late July and has recently uptrended. While the data this summer has not been indicative of a robust USA economic recovery, and actually were dismal at the bottom, the recent uptrend is encouraging.


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