ECRI: Recession Will Be Over By End of Summer; WLI Registers Largest Three-Month Gain in History
NEW YORK, June 19 (Reuters) - A gauge of future U.S. economic growth rose along with its yearly growth rate, reaffirming hope that yearly growth will turn positive in the summer months, a research group said on Friday. The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index (WLI) rose to a 36-week high of 117.1 for the week ending June 12, from an upwardly revised 116.2 the previous week (see chart above). In recent weeks, the group has forecast that the U.S. recession will end sometime during this summer, as its yearly economic growth reading rebounds from late-2008 lows.
MP: The WLI has increased nine weeks in a row - the last time that happened was almost 20 years ago - and the index has increased in 13 out of the last 14 weeks (data here). The index of future economic activity is now at a 9-month high of 117.1, the highest level since October 3 of last year (see chart above). Further, the 12-point, three-month increase in the WLI from the early March low of 105.1 is the largest three-month gain in the history of the WLI back to 1967.
"With WLI annualized growth rocketing up almost 30 percentage points in six months (MP: from -28.1% in December), it's virtually pounding the table about the recession ending this summer," said Lakshman Achuthan, managing director at ECRI.