Economic Cycle Research Institute periodically publishes their leading, coincident, lagging indicator indexes for US economy. They have been pretty useful to track how the US economy has been progressing. Let's look at what current picture do they portray.
Weekly Leading Index:
The weekly leading index was dropping from a peak in end of Jan' 2018 till end of Dec' 2018 consistently indicating for whole of year 2018 to anticipate a reduction in growth of economic activity and a turning down business cycle. However, since the beginning of Jan' 2019 the index has picked up a bit (hockey stick?) with an almost neutral reading on quaterly rate of change. Does it mean the business cycle has bottomed? Not that early to conclude - we have to wait and watch what happens in next couple of weeks.
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| US Weekly Leading Index - 2019-01-18 |
Coincident Index:
While the weekly leading index was declining for whole of 2018, the coincident index didn't budge much indicating a growing economy. However, what is troubling is the peaking behavior and turning down of its yearly rate of change. If it continues to turn down (taking the index down) then it would indicate we are at an almost peak in economic activity right now and economic situation should deteriorate. One should continue to monitor it for next couple of months along with the weekly leading index.
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| US Coincident Index - 2018-12-01 |
Lagging Index:
The lagging index has been growing steady with a rising rate of yearly change clearly indicating the strength that was in US economy in previous quarters with the added juice. The important question is will it continue?
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| US Lagging Index - 2018-12-01 |