Boom Doom Economy: USA Weekly Leading Index Drops Below 130 (Charts) *Annualized growth rate dips to +7.5%*

Saturday, April 30, 2011

USA Weekly Leading Index Drops Below 130 (Charts) Annualized growth rate dips to +7.5%

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ECRI Economic Weekly Leading Index and Annualized Growth Rate

*** Updated April 29, 2011 for the week ended April 22, 2011 ***

USA Weekly Leading Index

Overview The USA Economic Weekly Leading Index (WLI) was down -2.4 to 129.3 (preliminary) for the week ended April 22, 2011. This is the largest weekly decrease since May 10, 2010 (-5.0).

Trend The Weekly Leading Index (preliminary) has reversed to a short term downtrend and continues an intermediate term uptrend, and is downtrending long term.

Cycle History 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, from the Post-Great Recession cyclical peak 134.9 for the week ended April 30, 2010 through the latest week reported.

USA Annualized Growth Rate

Overview The WLI Annualized Growth Rate (AGR) was down -0.2% to +7.5% (preliminary) for the week ended April 22, 2011. The Annualized Growth Rate has increased or held steady 35 weeks in the past 39 weeks.

Trend The Annualized Growth Rate (preliminary) has reversed to a short term downtrend, the intermediate trend has been upwards, and the long term trend is still below the late 2009 and early 2010 highs.

Cycle History 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, from the Weekly Leading Index cyclical peak for the week ended April 30, 2010 through the latest week reported. A negative growth % was reached in early June 2010, remained negative for 28 consecutive weeks until the past 18 weeks.

Commentary The current Annualized Growth Rate at +7.5% (preliminary) dipped below last week's 48-week high, the highest since the week ended May 14, 2010 (+9.3%). The current Weekly Leading Index at 129.3 (preliminary) dipped below last week's 49-week high, the highest since the week ended May 7, 2010 (132.0). Both the Weekly Leading Index and the Annualized Growth Rate are in both short-term downtrends, intermediate-term uptrends, and continue at very encouraging levels. The AGR is definitely off the bottom reached in late July, and is holding the gains made. The WLI has dipped again below the benchmark 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 formerly negative AGR.