Archive | March, 2012

ECRI WLI Growth Conundrum

More recently, ECRI has switched from the use of smoothed 6-month growth rates (as calculated by their WLIg growth metric) to  annual (52-week) growth numbers of its Weekly Leading Index (WLI) to prop up a recession scenario. The reason cited is “…a wide­spread sea­sonal adjust­ment prob­lem that  econ­o­mists have known about for some time.”  Another native Capetonian, Prieur […]

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U.S economy almost back to par growth

The U.S Coincident SuperIndex, which estimates U.S economic current growth, is within a whisker of returning to the growth rate normally averaged by the economy after 33 months into an expansion, as shown by the chart on the left. However, cumulative growth since the start of the expansion still remains sub-par (right chart) due to 22 […]

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A Stylized Approach to Recession Forecasting

The traditional method for recession forecasting is to find an economic indicator or composite index that has a high correlation and adequately responds in advance to economic expansion or contraction. One then de-trends this indicator by taking a growth rate (straight or smoothed) over x-months and plotting that on a chart. When this growth rate […]

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A Recession Fear Indicator

An analysis of Google global search volume for the term “recession” reveals a promising new recession indicator that nailed the official NBER start of the 2008 great recession to within 2 week lag of its peak. It is also interesting to note the spike in mid-to-late August 2011 (around the time the SP-500 bottom that […]

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