WATCH OUT: The ECRI Leading Indicators Just Went Negative

The Business Insider ^ | 6-11-2010 | The Pragmatic Capitalist

[blam]

WATCH OUT: The ECRI Leading Indicators Just Went Negative

The Pragmatic Capitalist
Jun. 11, 2010, 12:42 PM

Via Barrons:

The Economic Cycle Research Institute today offered up its view of last week’s “weekly leading indicators,” a closely watched private mailing, today showed a dip in the indicator for the week ended last Friday to 123.2, a decline of 3.5%, in contrast to the 0.3% rise the preceding week.

The Institute’s Lakshman Achuthan, however, remarked that “While the plunge in WLI growth to a one-year low assures a significant slowing in U.S. economic growth in the coming months, the recent weakness has not lasted long enough to signal a new recession threat.”

The ECRI notice follows better-than-expected consumer confidence data this morning from the University of Michigan, but also a smaller-than-expected gain in business inventories in Apri, this morning’s weak retail sales data for May and, of course, last Friday’s disappointing jobs number.

Image: pragcap.com

[snip}

(This post originally appeared at The Pragmatic Capitalist.)

[blam]

More On The Huge Slowdown Predicted By The ECRI Leading Indicators

Vincent Fernando, CFA
Jun. 11, 2010, 12:49 PM

As just mentioned, the ECRI's leading economic indicator has nose-dived. Zero Hedge believes it's a very worrisome sign and adds some good perspective with the following chart:

David Rosenberg's favorite leading indicator, the Economic Cycle Research Institute (ECRI) Leading Index, fell to 123.2 in the week ended June 4, down from 124 the week before, a -3.5% annualized contraction: the first time this has gone negative in over a year. This is the lowest level since July 31, 2009, when it was at 122.4, as the chart below demonstrates.

Consensus has expected slower GDP growth in the second half of the year, so the question is whether this index dive simply represents that or something more ominous.

[buffyt]

I read the other day that this will be a double dip or “W” shaped Recession.... So someone made a joke “W”...
Bush’s fault.

I know he will be blamed, even though Obama is spending us into oblivion.

[Cold Heart]

I’ve come to believe you are the secret manipulator of the market:) Whenever you post something negative, the market goes down. I got a good buy on some penny stocks and HOPE to make a quick profit on the upward CHANGE:)

Could you hold off on the bad news for about a week:)

Speaking of CHANGE, I not getting back into the market (except for the penny stock gaming) until therte is a CHANGE in Washington!

[taxcontrol]

Recession - when your neighbor gets laid off
Depression - when you get laid off

Recovery - when Obama gets laid off

[misterrob]

A “w” recession is a classic double dip where you get a down turn, a resurgence then another downturn. Often caused by bad policy decisions to the first crash.

[Cold Heart]

That’s a good one, I will use it.

[blam]

"I’ve come to believe you are the secret manipulator of the market:)"

(ahem) My instructions to the PPT (Plunge Protection Team) today is to make sure that the DJIA closes above 10k. See the DJIA daily results here.

[SatinDoll]

bookmark

[Cold Heart]

Thanks! I just checked. My penny stock just went up $0.003:)

[KeyLargo]

U.S. in Dire Straits?

Reagan Administration Budget Director David Stockman compares the U.S. to Greece

http://video.foxbusiness.com/v/4233018/look-to-emerging-markets-for-money/?playlist_id=87185

[blam]

I think you linked to the wrong video. This video (the one you linked) is about emerging markets.