Chart courtesy of ECRI
As the chart above reveals, ECRI’s leading indicators are deep into recession territory. Not only are they weekly measures at the lowest levels in 5 years, but the annualized drop is the biggest in 28 years.
"The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index fell to 125.9 in the week to Aug. 15 from 126.4 in the previous period. Its annualized growth fell to negative 11.4 percent from minus 10.7 percent, revised up from minus 10.8 percent. It hit its lowest mark since the week to June 13, 1980, when it was negative 11.8 percent.
The index declined to its lowest since July 2003 due to lower stock prices and housing activity, and the fall was partly offset by lower interest rates and jobless claims, said in an instant message interview Lakshman Achuthan, managing director at ECRI.
"Last year WLI growth fell to its worst reading since the 2001 recession, and today it has plunged to a 28-year low, its worst reading since the 1980 recession," he wrote. "This makes it crystal clear that there is no business cycle upturn in sight."
It is getting increasingly difficult for event he most polyannish permabull to claim — at least within a straight face — that there is no US recession.
Weekly Leading Index (WLI) Press Release
Friday, August 22, 2008
US yearly growth gauge drop biggest in 28 yrs-ECRI
Reuters, Aug 22, 2008 10:31am
Squawk Box will run a 4 part series on Grand Lake Stream trip this week. 4 Packages which Steve Liesman will wrap around, beginning at 7:15am, and then repeating throughout the week. (I believe the full package will run sometime on Labor Day weekend)
The 1st installment of the Kansas City Shadow Fed/Maine Leen’s Lodge fishing trip will air Tuesday at about 7:15 am EST.
I had a long sit down with Steve for part 2 and 3 — unshaven, unshowered, reeking of fish – be happy its not broadcast in smell-o-vision.
It will be interesting to see what gets cut and what stays in but you never know what ends up on the cutting room floor.
Tuesday – Friday
Part1: The forecast/results of the survey and an overall review of the trip
Part 2: fishing for answers to the credit crisis Part 1
Part 3: fishing for answers to the credit crisis Part 2
Part 4: The future of the banking system
Harvard University economist Martin Feldstein, a member of the committee that charts American business cycles, said the Federal Reserve cannot count on low interest rates to buoy economic growth.
"Lower interest rates are not going to get us anything more,” Feldstein, who retired in June as president of the National Bureau of Economic Research. The economy has really shown one sign after another of weakening.”
(why this sometimes works with on a Mac and sometimes not is beyond me)
Feldstein Says Low Rates May Not Boost U.S. Growth
Anthony Massucci and Kathleen Hays
Bloomberg, Aug. 21 2008