ECRI: ECONOMY IS BEGINNING TO SLOW
The ECRI confirmed what yesterday’s GDP report is telling us – the economy remains in recovery, however, is beginning to slow. From Reuters:
A measure of future U.S. economic growth rose in the latest week but its annualized growth rate fell, signaling a slowing in the pace of economic growth going forward, a research group said on Friday. The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index rose to an almost two-year high of 133.7 for the week ended April 23, from 133.0 the prior week.
That was the highest level since May 9, 2008, when it stood at 133.8. But the index’s annualized growth rate fell to a 38-week low of 12.4 percent from 12.5 percent a week earlier. That was the lowest since July 31, 2009, when it stood at 11.2 percent. “With WLI growth declining to a 38-week low, overall U.S. economic growth will soon begin to ease, in line with the downshift in GDP growth shown in this morning’s data,” said Lakshman Achuthan, managing director of ECRI.
Source: Reuters
No way!? Who would have thought that would happen/
“But the index’s annualized growth rate fell to a 38-week low of 12.4 percent from 12.5 percent a week earlier. That was the lowest since July 31, 2009, when it stood at 11.2 percent.”
true, but one look at the graph tells you that the current growth rate is still higher than it has been all DECADE, save for the last couple of quarters.
plus, this is a graph of leading growth indicators…maybe as we transition to expansion, coincident indicators gain more significance
in any event, the title of this post is dead wrong; the economy is not starting to slow; it is still growing (indeed faster in rate than most of this decade); the news is that the growth rate is starting to slow
The title of this post is not misleading in one single way. The very same words came out of the mouth of Achuthan:
“overall U.S. economic growth will soon begin to ease”
Overall, I agree with your assessment that the economy is not rolling over, but the ECRI and yesterday’s GDP report clearly demonstrate some uncertainty with regards to the sustainability of future growth.
I know it doesn’t mesh with your super bull on steroids outlook, but it is what it is.
some time ago CXO has done a piece on relationship between ECRI and stock market – not much i believe.
Pretty sure that study covered the actual index itself and not the growth rate. It’s the growth of the index that matters most not the actual reading. Thus far, the growth rate would imply that the economy continues to expand nicely though at a lesser rate.