Today, we must sound the alarm bells loud and clear. ECRI's leading indices of U.S. economic activity have turned down in a textbook sequence — first the U.S. Long Leading Index, then the Weekly Leading Index, and finally the U.S. Short Leading Index. Their growth rates are also in cyclical downswings, as are the growth rates of every one of ECRI's sector-specific leading indexes. Under the circumstances, there is no indication that a reacceleration in economic growth is near at hand.---Rosenberg 9.27
In the process of scrutinizing the evidence, we examined every one of these leading indexes to check whether they are in pronounced, pervasive and persistent (three P's) downturns consistent with a 'hard landing,' namely, a recession, rather than a non-recessionary slowdown. After examining the three P's for all of these leading indexes, we found that the overwhelming majority of their trajectories are currently in recessionary configurations. In practice, such a finding is sufficient to justify a recession call.
A useful way to summarize the evidence we see pointing to recession is to examine the spread of weakness among the components of ECRI's U.S. leading indexes of economic activity ... In that context, the recessionary decline in a summary measure of numerous reliable leading indicators, coupled with an ominous drop in a broad measure of current economic activity representing facts, not forecasts, constitutes a compelling recession signal
Thursday, September 29, 2011
ECRI Predicts Recession
A week ago, the Economic Cycle Research Institute issued its U.S. cyclical outlook, summarized with Economy on Recession Track — The jury is in, and the verdict is recession. This index is not infallible, but it does have a better track record than most...Here is what the ECRI just reported: