The ECRI’s Weekly Leading Indicators (WLI) has now fallen 8 consecutive weeks and has been below -10 for two consecutive weeks.
click on chart for sharper image
Given the July bounce in the stock market, the ever-optimistic me expected some sort of anemic bounce in the WLI as well, but that bounce never came. Of course, it would be helpful to know the makeup of WLI (components and percentages), but unfortunately that information is proprietary.
Nonetheless, we can say there has never been a WLI plunge in history of this depth and duration, nor any dip at all below -10 that has not been associated with a recession.
Whatever the ECRI sees preventing them from issuing a recession alert remains a mystery.
Then again, as I pointed out two weeks ago in ECRI Weekly Leading Indicators at Negative 9.8; Has the ECRI Blown Yet Another Recession Call? the ECRI is literally paranoid about calling a recession that does not occur. So they wait until it is blatantly obvious we are in one before issuing a warning.
However, in light of today’s GDP report sporting 3 Years of Massive Downward GDP Revisions it is becoming increasingly likely that the recession that started in 2007 never ended.
Mike “Mish” Shedlock
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