ECRI GROWTH GAUGE CONTINUES TO DECLINE
25 June 2010 by Cullen Roche
8 Comments
The ECRI’s weekly leading indicator’s annualized growth gauge continued to decline in the last week while the index actually climbed a bit. The Weekly Leading Index rose to 122.9 from 122.4 in the past week. The annualized growth rate fell to -6.9% from -5.8%. LakshmanAchuthan, managing director of ECRI says a slowdown is inevitable:
“After falling for six weeks, the uptick in the level of the Weekly Leading Index suggests some tentative stabilization, but the continuing decline in its growth rate to a 56-week low underscores the inevitability of the slowdown.”
Is it just me or is this a total coincident indicator? The S&P is down huge this week. I wonder if next week’s ECRI reading will be down huge also?
A slowdown from 2.7% growth is not good even if we don’t call it another recession.
Never fear, our Central Banks will rectify this in one quarter.
Sorry if this is a dumb question, but thanks in advance for taking it at face value… how could weekly go up and yearly go down at the same time?
Index grew, but the rate of growth fell.
Okay, thank you.
useless indicator since the majority of the constituents are market indicies; if market falls, this indicator falls, creating a circular reference.
No Dan this is not just you. The market is edging downward because everyone that does this for a living knows that when the ECRI’s LEI reaches this low you are almost guaranteed a recession, which means a major drop in the S&P. We are at -7% now, at -8% it has been a 100% certainty of a recession for the last 50 years. So everyone is just realigning their portfolios to allow them to better withstand a major correction. At the same time they do not want to sell too much just in case the government decides to put out another stimulus plan which might allow for more room on the upside.