Saturday, July 11, 2009

ECRI: End of Recession is Near, Recovery Imminent


NEW YORK (Reuters) - A gauge of future U.S. economic growth edged higher in the latest week, sending its yearly growth rate to a two-year high that suggests a near-term end to the recession, a research group said on Friday.

The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index rose to 118.5 for the week ended July 3 from a downwardly revised 117.4 in the prior period, which ECRI initially reported at 117.6 (see bottom chart above, data here). The index's annualized growth rate plowed further into positive territory to a two-year high of 5.4 percent from 3.9 percent the week prior, which was revised lower from 4.0 percent (see top chart).

It was the highest annual growth rate the gauge has seen since the week to July 20, 2007, when it read 5.7%. ECRI Managing Director Lakshman Achuthan holds that recovery is imminent before the year's end, as long as economic data continues to weaken at a slower pace. "It is increasingly evident that, despite widespread misgivings based on backward-looking economic data, the end of recession is at hand," said Achuthan.

8 Comments:

At 7/11/2009 9:39 AM, Blogger marketdoc said...

With all the hype last week about the unemployment numbers people seem to have forgotten unemployment is a LAGGING indicator.

 
At 7/11/2009 12:03 PM, Anonymous Anonymous said...

Judging from the increasing number of trucks on the interstate roads, I would say the recession is over.

Companies have put off maintenance and replacement of machines as long as they can. Now they have to buy.....

 
At 7/11/2009 12:14 PM, Blogger Robert Miller said...

U.S. consumer sentiment sours in early July:

July 10 (Reuters) - The Reuters/University of Michigan Surveys of Consumers' Sentiment preliminary index for July fell to 64.6 from June's final reading of 70.8 according
to a report released on Friday.

Back in June you were dancing.

Now you seem to forget the index from your own university ever existed.

The dance party is over.

 
At 7/11/2009 3:43 PM, Anonymous Anonymous said...

Anonymous 1,

My wife and I noticed the same thing on a recent family vacation...truck traffic was WAY up on I-94 between Minnesota and Wisconsin compared to late last fall.

I've also noticed a lot more freight train traffic in our area in recent months.

 
At 7/12/2009 7:31 AM, Anonymous Anonymous said...

Ditto, here in Connecticut I-95 traffic and truck traffic, in particular, are way up from 3-6 months ago. Restaurants seem to be doing better, as well. Still penty of For Sale signs on houses.

 
At 7/12/2009 10:13 AM, Anonymous Anonymous said...

ECRI's Long, Short and Weekly Leading Indicators are surging. Does anyone have any idea of the composition of their indicators? I'd love to have an inkling of what hey are looking at (I know yield curve and stock market make up some of it). Any ideas??

 
At 7/12/2009 4:03 PM, Blogger Ritholtz said...

The ECRI LEIs began turning upwards in April. (See this post:

http://www.ritholtz.com/blog/2009/04/navigating-equities-after-a-financial-crisis/).

Before you get too excited, note that the ECRI LEIs have done very well during traditional manufacturing/inventory recessions.

Their performance for a recovery during a credit crisis and a housing bust is untested. Indeed, as the chart shows, they sort of drifted lower in the early part of the recession, and did not give much a signal until deeper until 2008.

Whether they generate a timely signal or not prior to a recovery is anyone's guess . .

 
At 7/12/2009 9:45 PM, Anonymous Anonymous said...

ECRI will turn down now that stocks are going down again

 

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