As I’ve done a couple of times, I’m going to start my Wealth Advisory with a quick update on the ECRI Weekly Leading Index. I first wrote about it back in November of last year, and back then, my point was to alert you to the fact that the economy was, without a doubt, going to recover. Now, of course, most people are coming around to that view.
Interestingly, however, the Weekly Leading Index has continued to soar. As of last Friday, the Index’s growth rate, which measures its rate of change during the past six months or so, stood at 21.3%. What does that mean? Well, ECRI has been tracking changes to the Index for decades, and that is the highest growth rate … ever!
Granted, some of that is because of just how steep the previous economic drop was. This indicator has an outstanding track record, and it’s telling you that the economy is going to roar ahead in the next six to nine months at a much stronger-than-expected rate; I personally wouldn’t be surprised to see a couple of GDP quarters with growth over 6%. Even more encouraging, ECRI Managing Director Lakshman Achuthan said that he expects non-manufacturing employment to be positive by year-end.
Just to reiterate, I am not an economist, and don’t pretend to be. But I read and listen to the news just like everyone else, and I continue to be struck by just how pessimistic the tone is–I have heard from far more people worried about another Lehman Brothers-type event than those worried about missing the economic upswing. Even people who admit that an economic recovery is starting believe a double-dip recession could occur. Or, failing that, they fear we’ll be stuck in modest, sub-par growth for years.
While the Weekly Leading Index doesn’t look years ahead, it says in no uncertain terms that the economy is going to look great in a few months. So get your head out of the sand and don’t listen to all the worrywarts out there!