Boom Doom Economy: USA Weekly Leading Index at 29-Week Low (Charts) "Economy set for sustained slowdown in growth"

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ECRI Economic Weekly Leading Index and Annualized Growth Rate

*** Updated July 1, 2011 for the week ended June 24, 2011 ***

USA Weekly Leading Index

Overview The USA Economic Weekly Leading Index (WLI) was down -0.6 to 126.4 (preliminary) for the week ended June 24, 2011. The Weekly Leading Index has decreased 6 of the past 7 weeks, decreased 8 of the past 10 weeks, and is at a 29-week low (126.4 for the week ended 12-3-10).

Trend The Weekly Leading Index (preliminary) has reversed to a short-term downtrend (2 consecutive week). The intermediate-term (6 months) trend is slightly decrease. The long-term (12 months) trend continues increasing slightly.

Cycle History The recent short-term peak was 131.8 for the week ended April 15, 2011 while the WLI is currently at a short-term low of 126.4. 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 intermediate-term cyclical 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) was down -0.9% to +2.0% (preliminary) for the week ended June 24, 2011. The Annualized Growth Rate has decreased 10 consecutive weeks and is at a 27-week low (+0.7% for the week ended 12-17-10).

Trend The Annualized Growth Rate (preliminary) continues a short-term downtrend, the intermediate-term (6 months) trend has leveled off, and the long-term (12 months) trend continues upwards.

Cycle History The recent short-term peak was +7.7% for the week ended April 15, 2011 while the AGR is currently at a short-term low of +2.0%. 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 intermediate-term cyclical low for the week ended July 9, 2010 through the latest week reported. A negative growth % was reached in early June 2010, remained negative for 28 consecutive weeks, and now has been positive the past 28 weeks (since the week ended December 24, 2010).

Commentary The Weekly Leading Index continues a short-term downtrend, decreasing 6 of the past 7 weeks and the Annualized Growth Rate has decreased 10 consecutive weeks. The current Weekly Leading Index at 126.4 (preliminary) is a 29-week low and now well below the 49-week high of 10 weeks ago (131.8 for the week ended April 15, 2011), which was the highest since the week ended May 7, 2010 (132.0). The current Annualized Growth Rate at +2.0% (preliminary) is a 27-week low and now well below the 48-week high of 10 weeks ago (+7.8% for the week ended April 15, 2011), which was the highest since the week ended May 14, 2010 (+9.3%). Gains attained continue eroding. The WLI has been below the benchmark 130.00 level for 10 consecutive weeks and the AGR is near the 0.00 benchmark. While this has not been indicative of a robust USA economic expansion, and actually was dismal at the bottom in July 2010, the Weekly Leading Index and Annualized Growth Rate overall continue at levels that indicate some economic growth, even though the trend is worrisome. Both indicate an ongoing slow 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 and is a 4-week moving average. ECRI's Co-founder Lakshman Achuthan stated on July 1, 2011, "With WLI growth experiencing a pronounced and pervasive decline for 10 straight weeks from its mid-April peak to a 27-week low, the economy is set for a sustained slowdown in growth".