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ECRI Leading Indicators Dip Again; Is a Double-Dip Recession Coming?

By Mike Shedlock on 05/28/2010 – 11:30 am PDTLeave a Comment

Inquiring minds are investigating leading indicators of the Economic Cycle Research Institute (ECRI). Here are a couple of charts.

Weekly Indexes

Monthly Indicators

Recent Trend in WLI

Please click on the first link for WLI spreadsheet data all the way back to 1967 and other interesting charts.

My friend “BC” writes …

The WLI is again below the 126 level where it was all the way back to spring ‘98, the point at which the growth of industrial production and private employment peaked.

The 126 level is below zero on a post-’00 trend rate basis as occurred when it dipped below zero in Apr.-Sept. ‘00 and July ‘08.

If the trend rate since Q3-Q4 ‘09 persists, the WLI growth rate could fall below zero and reach the negative 5-6% by as soon as July-Oct. This is an area consistent with ECRI “forecasting” a recession.

At present, the ECRI gang are talking just deceleration of “growth”. But I suspect that by no later than mid-summer they will shift to urging more Keynesian stimulus to “avoid a double-dip recession” when a deceleration to 0% and imminent contraction will likely already be underway.

Then, in hindsight, the ECRI will “forecast” a recession after it had already started, attributing the “unexpected” contraction to “policy missteps”, “exogenous shocks”, or some such silliness.

Makeup of the WLI

I do not have the exact percentage makeup of the WLI but reportedly it includes the Mortgage Bankers Association’s home purchase index, money supply, stock prices, initial jobless claims, corporate yield spreads (inverted), and corporate bond quality spreads

Related Articles:

  1. No double-dip recession in store, but no V either
  2. Follow The Leader: Index of Leading Economic Indicators March 2010
  3. Technical Analysis Indicators in Real Time (
  4. OECD Composite Leading Indicators
  5. The index of leading indicators in Canada rose by 0,8%

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