Stronger Economic Growth?
Maybe, but don’t hold your breath. While the Economic Cycle Research Institutes Weekly Leading Index is up again, it is a bit too soon to say that this heralds stronger economic growth in the months ahead.
The Economic Cycle Research Institute, an independent forecasting group, said its weekly leading index (WLI) rose to to 132.7 in the week ended Nov. 12 compared with 132.2 in the previous week.
Helping to boost the index were higher commodity prices, a sign of underlying demand, and a narrower risk spread between bonds of higher and lower quality, ECRI said.
Although the index rose slightly, the gain was offset by the negative effect of higher interest rates. The index’s annualized growth rate, which smoothes out weekly fluctuations, rose to -0.7 percent from -1.1 in the prior week.
“Contrary to popular belief, with the WLI essentially flat, the economic growth outlook has yet to improve,” said Lakshman Achuthan, managing director of ECRI.
“In order for us to forecast a stronger rebound in growth, we would need to see a more persistent, pronounced and pervasive rise in the weekly leading index,” he said.