Today's release of the publicly available data from ECRI (Economic Cycle Research Institute) puts its Weekly Leading Index (WLI) at 144.1, down 0.4 from the previous week. Year-over-year the four-week moving average of the indicator is now at 9.83%, down from 10.96% the previous week. The WLI Growth indicator is now at 7.9, also down from the previous week.
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"EM: From Ugly Ducklings to Swans"
ECRI's latest feature touts ECRI's so-far correct prediction from an article in November claiming that instead of a flight from Emerging Markets, they would benefit post-election and "outshine advanced economies". Backing up their prediction post-election are returns for EM stocks that are 1.5x returns for Developed Market stocks. Time will tell if the positive consensus on EM continues. Read more
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.
