Chart courtesy of ECRI
As the chart above reveals, ECRI’s leading indicators are deep into recession territory. Not only are they weekly measures at the lowest levels in 5 years, but the annualized drop is the biggest in 28 years.
"The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index fell to 125.9 in the week to Aug. 15 from 126.4 in the previous period. Its annualized growth fell to negative 11.4 percent from minus 10.7 percent, revised up from minus 10.8 percent. It hit its lowest mark since the week to June 13, 1980, when it was negative 11.8 percent.
The index declined to its lowest since July 2003 due to lower stock prices and housing activity, and the fall was partly offset by lower interest rates and jobless claims, said in an instant message interview Lakshman Achuthan, managing director at ECRI.
"Last year WLI growth fell to its worst reading since the 2001 recession, and today it has plunged to a 28-year low, its worst reading since the 1980 recession," he wrote. "This makes it crystal clear that there is no business cycle upturn in sight."
It is getting increasingly difficult for event he most polyannish permabull to claim — at least within a straight face — that there is no US recession.
Weekly Leading Index (WLI) Press Release
Friday, August 22, 2008
US yearly growth gauge drop biggest in 28 yrs-ECRI
Reuters, Aug 22, 2008 10:31am