11Sep2009 - ECRI WLI growth rate hits all-time high

[Swing low, sweet chariot. Comin' for to carry me home.]

September 11, 2009

(Reuters) - A weekly gauge of future U.S. economic growth hit a year-high in the latest week, sending its yearly growth rate to an all-time high that points to a more vigorous recovery than consensus has shown.

The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index rose to 125.4 in the week to Sept. 4 from a revised 124.6 the prior week, which was originally reported at 124.7.

It was the highest WLI reading since Sept. 5, 2008, when it stood at 126.0.

The index's annualized growth rate surged to a record high of 21.3 percent from 20.8 the previous week.

"The rise in WLI growth to a record high reinforces our earlier forecast that at least the early stage of the current economic recovery will be more vigorous than the last two," said ECRI Managing Director Lakshman Achuthan.

Achuthan recently told Reuters that a double-dip recession is highly unlikely, and that the United States is poised for a far stronger recovery than many are projecting.

"We expect non-manufacturing employment -- which is where 91 percent of us work -- to be positive by year end," Achuthan said.

"We are talking about recovery that includes jobs growth in the non-manufacturing sector, and we are talking about a recovery that includes increases in consumer spending. So, in spite of the fact that many people look at this recession as being unprecedented and unlike any other, what we're seeing in our indexes is that there are a lot of similarities to previous recessions and recoveries," he added.

This week's index was pushed higher largely to stronger housing activity, according to ECRI.

[opebo]

Sounds great.. now when will it actually begin to occur?

[Swing low, sweet chariot. Comin' for to carry me home.]

Sounds great.. now when will it actually begin to occur?

Right now!  Look at the data released in the last two weeks - we are ALREADY in recovery, the economy is growing again.  The latest piece of the data out just this morning is retail sales - big surprise to the upside, even the ex-autos number was up 1.1%.

But ECRI's indexes can only see out over the next 4-6 months.

[phk]

How is the WLI calculated?

[Swing low, sweet chariot. Comin' for to carry me home.]

How is the WLI calculated?

proprietarily 

[phk]

How is the WLI calculated?

proprietarily 

Do they say what goes into this index?

[CARLHAYDEN]

jmfcs.

Please carefully reread the following:

"The index's annualized growth rate surged to a record high of 21.3%..."

Those are Bernie Madoff type numbers!

I'm amazed ECRI would release such absurd numbers!

Do you really believe those numbers (i.e. have you lost your mind).

Oh, and if you do, could you please cite one example of where the American economy has had an annualized growth rate in the double digits (not even half of the ECRI 'projection').

[Swing low, sweet chariot. Comin' for to carry me home.]

jmfcs.

Please carefully reread the following:

"The index's annualized growth rate surged to a record high of 21.3%..."

Those are Bernie Madoff type numbers!

I'm amazed ECRI would release such absurd numbers!

Do you really believe those numbers (i.e. have you lost your mind).

Oh, and if you do, could you please cite one example of where the American economy has had an annualized growth rate in the double digits (not even half of the ECRI 'projection').

the 21.3% growth rate of the index does NOT correlate to 20% GDP growth.  there has never been a direct 1:1 correlation, and ECRI has never claimed that. 

for example, last year, the growth rate of the index was near NEGATIVE 30%.  historically, a rate of negative 5-6% in this index has meant recession

what it does mean is that GDP growth will be north of 3.5% for the next six months