Friday, March 4, 2011

USA Weekly Leading Index Dips to 129.8 (Chart) *Annualized growth rate at 41-week high*

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ECRI Economic Weekly Leading Index and Annualized Growth Rate
*** Updated March 4, 2011 for the week ended February 25, 2011 ***


USA Economic Weekly Leading Index Dips to 129.8

Overview The USA Economic Weekly Leading Index (WLI) was down -0.7 to 129.8 (preliminary) for the week ended February 25, 2011.

Trend The WLI continues short term, intermediate and long term uptrends. The WLI continues above the uptrending 13-week moving average of 128.7 for the 26th consecutive week. The WLI continues above the ascending 26-week moving average of 126.0 for the 18th consecutive week. The WLI continues above the level 52-week moving average of 126.0 for the 13th consecutive week. (The 13-week, 26-week, and 52-week moving averages charts are not shown on this page).

Cycle History The WLI (preliminary) for the week ended February 25, 2011 is down -5.3 and -4% from the Post-Great Recession peak of 135.1 for the week ended April 30, 2010. The current WLI is up +9.3 and +8% from the intermediate term bottom of 120.5 for the weeks ended July 9 and 16, 2010. Therefore, the current WLI (preliminary) is closer to the cyclical peak than trough.

Weekly Leading Index (Chart) Below is a chart of the latest 44 weeks of the ECRI Weekly Leading Index, from the cyclical peak 135.1 for the week ended April 30, 2010 through the latest week reported, February 25, 2011. As can be seen, the WLI declined significantly from the April peak and then has uptrended subsequently.




USA WLI Annualized Growth Rate Continues Positive and at 41-Week High!

Overview The WLI Annualized Growth Rate (AGR) was up +0.4% (preliminary) to +6.6% for the week ended February 25, 2011. This is the 29th increase in the past 31 weeks plus a 41 week high.

Trend The Annualized Growth Rate has been on a steady uptrend, has increased or held steady for 25 of the past 26 weeks, and increased or held steady for 29 of the last 31 weeks. This was after 12 consecutive weekly declines from the week ended May 7, 2010 to the week ended July 23, 2010.

Cycle History The Annualized Growth Rate for the week ended February 25, 2011 is down -21.2 and -77% from the peak of +27.7% for the week ended October 9, 2009. The current Annualized Growth Rate is up +17.4 and +160% from the recent intermediate term bottom of -10.9% for the week ended July 23, 2010. Therefore, the current Annualized Growth Rate (preliminary) continues closer  to the cyclical trough than peak, but is well off the bottom.

Annualized Growth Rate (Chart) Below is a chart of the latest 44 weeks of the ECRI WLI Annualized Growth Rate, from the WLI cyclical peak for the week ended April 30, 2010 through the latest week reported, February 25, 2011. The Post-Great Recession cyclical peak was +27.7% in early October 2009. A negative growth % was reached in early June 2010, remained negative for 28 consecutive weeks until the past 11 weeks.



Commentary The Annualized Growth Rate at +6.5% has continued positive 11 weeks and in an overall uptrend for 31 weeks, after being negative for 28 consecutive weeks (June 4, 2010 to December 10, 2010). Both the Weekly Leading Index and the Annualized Growth Rate are in a short term uptrends and at very encouraging levels. The AGR is definitely off the bottom reached in late July, has continued uptrending, and is now at a 41-week high. The WLI is just below the 130.00 level. While this has not been indicative of a robust USA economic expansion, and actually was dismal at the bottom in July 2010, the overall uptrend of the Weekly Leading Index and Annualized Growth Rate is encouraging and indicates an ongoing modest expansion of the USA economy.

Per the ECRI, 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 AGR.


Lakshman Achuthan of ECRI: USA Economy: No Double Dip Recession, No Rapid Recovery

In a post-Halloween interview (video below), Achuthan has stated there will be no double dip recession, but no rapid recovery either. Slower GDP growth and slower jobs growth will continue "well into next year". Economy will continue to grow - slowly.

(FBN) ECRI Managing Director Lakshman Achuthan argues even though there won't be a double dip recession, that doesn't mean there will be a rapid recovery.



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* Data courtesy of the Economic Cycle Research Institute *

 
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