ECRI WLI Falls Sharply
By: The Fundamental Analyst | Aug 29, 2011 |
The ECRI’s Weekly Leading Index (WLI) has fallen like a stone over the last couple of weeks. The latest index level of 122.8 is not far above the low of 120.3 level reached last summer when double dip fears abounded. Lachsman Achuthan, head of the ECRI has been pounding the table (see here, here and here) about a pronounced global slowdown in economic growth this year and the WLI is now reflecting that.
The WLI growth rate has turned negative now at -2.1%. Of course last summer the growth rate reaached -10.9% and the US economy still avoided recession, however this time round the downturn according to Achuthan is more persistent and pervasive than last year and will last at least through the end of the year. Note this is contrary to the Fed’s view of a pick up in growth in the second half of the year. My view continues to be that the US economy won’t be so lucky this year and a new recession is either already under way or imminent.
See the charts at the link