Friday, September 9, 2011

USA Weekly Leading Index Up Slightly (Charts) *Annualized growth rate plunges to 45-week low*

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ECRI Economic Weekly Leading Index and Annualized Growth Rate
* Updated September 9, 2011 for the week ended September 2, 2011 *


USA Weekly Leading Index

Overview The USA Economic Weekly Leading Index (WLI) increased +0.6, off a 45-week low, to 123.0 (preliminary) for the week ended September 2, 2011. This was the first increase after 4 consecutive weekly declines. The current Weekly Leading Index was undoubtedly affected by the stabilization in the equity markets during that week and has a positive correlation with same.

Trend The short-term trend (13-week moving average) and the intermediate-term trend (26-week moving average) continue decreasing. The long-term trend (52-week moving average) continues level.

Cycle History The recent short-term low was last week's reading of 122.4, the week ended August 26, 2011, which was a 45-week low. The recent short-term peak was 131.9 for the week ended April 15, 2011. The Weekly Leading Index reached a Post-Great Recession peak of 134.9 for the week ended April 30, 2010. A Great Recession low of 105.4 was set for the week ended March 6, 2009. 

Weekly Leading Index (Chart) Below is a chart of the ECRI Weekly Leading Index, including the intermediate-term low of 120.3 for the week ended July 9, 2010, through the latest week reported.



USA Annualized Growth Rate

Overview The WLI Annualized Growth Rate (AGR) again plunged -1.8% to a 45-week low of -6.2% (preliminary) for the week ended September 2, 2011. This is the lowest reading since the AGR was -6.2% for the week ended October 29, 2010. The AGR has had 4 consecutive, significant weekly plunges of -1.6, -2.0, -2.3, and -1.8. The Annualized Growth Rate had been positive for 34 consecutive weeks before turning negative the past 4 weeks. The AGR has decreased or been flat 17 of the past 20 weeks, including decreasing 11 consecutive weeks from April 22 through July 1.

Trend The short-term trend (13-week moving average) and the intermediate-term trend (26-week moving average) continue decreasing. The long-term trend (52-week moving average) continues upwards.

Cycle History The recent short-term peak was +8.0% for the week ended April 15, 2011. The recent short-term low is now the current -6.2% (preliminary) the week ended September 2, 2011.  The Annualized Growth Rate reached a Post-Great Recession peak of +27.8% for the week ended October 9, 2009. A Great Recession low of -29.8% was set for the week ended December 5, 2008.

Annualized Growth Rate (Chart) Below is a chart of ECRI WLI Annualized Growth Rate, including the intermediate-term low of -10.9% for the week ended July 23, 2010, through the latest week reported. The AGR became negative in early June 2010 and remained negative for 28 consecutive weeks. The AGR was then positive for 34 weeks (from the week ended December 17, 2010 through the week ended August 5, 2011). The AGR reversed to negative beginning the week ended August 12, 2011.


Commentary Overall, the Weekly Leading Index has leveled off and Annualized Growth Rate has plunged the past 4 weeks. The current Weekly Leading Index at 123.0 (preliminary) is just above last week's 45-week low and the Annualized Growth Rate at -6.2% is a 45-week low. Both are dismal, but remain above the July 2010 lows. Gains previously attained have eroded. The WLI has been below the now distant benchmark 130.00 level for 20 consecutive weeks and the AGR has been below the 0.00% benchmark for 4 consecutive weeks after 34 consecutive weeks above. The Weekly Leading Index and Annualized Growth Rate overall continue at levels that indicate any future economic growth is becoming questionable. Both the levels and trend are worrisome. Per the ECRI, the Weekly Leading Index projects forward approximately 6 months and the Annualized Growth Rate is relative to the WLI and is a 4-week moving average.


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