ECRI Weekly Leading Index: "Disentangling Cyclical from Structural"

Today's release of the publicly available data from ECRI (Economic Cycle Research Institute) puts its Weekly Leading Index (WLI) at 145.0, up 0.4 from the previous week. It is currently at an all-time high. Year-over-year the four-week moving average of the indicator is now at 10.90%, up from 10.32% the previous week. The WLI Growth indicator is now at 12.0, up from 11.9 the previous week and its highest since May of 2010.

"Disentangling Cyclical from Structural"

ECRI's latest feature article is a slide set and commentary delivered by Lakshman Achuthan on January 6th in Hong Kong. ECRI, in Achuthan's words, "are skeptical of claims that the global rise in yields is indicative of long-term structural improvement — whether attributed to the success of years of unconventional monetary policy accommodation, or to the anticipated hand-off to effective fiscal policy." See the full slide set and commentary here.

You may also like ECRI's Lakshman: Fed on a Collision Course

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.

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