Today's release of the publicly available data from ECRI (Economic Cycle Research Institute) puts its Weekly Leading Index (WLI) at 139.2, up 0.2 from the previous week. Year-over-year the four-week moving average of the indicator is now at 6.30%, down from 6.49% the previous week, which was the highest since August 2013. The WLI Growth indicator is now at 8.7, down from 8.8 the previous week.
"Fed Moves in Mysterious Ways"
ECRI's latest website feature is an article suggesting that the Fed has not responded correctly to the non-accelerating inflation rate of unemployment (the level of unemployment below which inflation rises). As ECRI's own Future Inflation Gauge suggests, inflation risk is rising, and the Fed As a result, the Fed "again runs the risk of falling behind the inflation cycle". Read the full article here.
You may also like Interview with OECD's William White on the Negative Side Effects of Ultra-Easy Money
The ECRI Indicator Year-over-Year
Below is a chart of ECRI's smoothed year-over-year percent change since 2000 of their weekly leading index. The latest level is above where it was at the start of the last recession.
RecessionAlert has launched an alternative to ECRI's WLIg, the Weekly Leading Economic Indicator (WLEI), which uses 50 different time series from various categories, including the Corporate Bond Composite, Treasury Bond Composite, Stock Market Composite, Labor Market Composite, and Credit Market Composite. An interesting point to notice — back in 2011, ECRI made an erroneous recession call, while the WLEI did not trigger such a premature call. However, both indicators are now generally in agreement and moving in the same direction.
Appendix: A Closer Look at the ECRI Index
