ECRI Weekly Leading Index Reaches Another New High

Today’s release of the publicly available data from ECRI (Economic Cycle Research Institute) puts its Weekly Leading Index (WLI) at 144.7, up 0.7 from the previous week. It is currently at an all-time high. Year-over-year the four-week moving average of the indicator is now at 10.15%, up from 9.52% the previous week. The WLI Growth indicator is now at 12.0, up from 11.8 the previous week and its highest since 2010.
‘Pinching Productivity’
ECRI’s latest feature article discusses the downside of possible repatriation tax reforms on labor productivity growth. A Q4 CEO Roundtable survey by ECRI suggests that many CEOs plan to increase hiring, but decrease capital spending if President-Elect Trump changes the repatriation tax policies. According to ECRI, this will lead to a subdued recovery in labor productivity growth based on simple math – the ratio of capital spending to hours worked = capital intensity. Read the full article here.
The ECRI Indicator Year-Over-Year
Below is a chart of ECRI’s smoothed year-over-year percent change since 2000 of their weekly leading index. The latest level is above where it was at the start of the last recession.

This post was published at FinancialSense on 01/06/2017.