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A Framework That Provides Clarity

During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.

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U.S. Long Leading Index: A Primer


The value of the ECRI’s U.S. Long Leading Index (USLLI) lies in its ability to spot cyclical turns in the level of economic activity before conventional leading indexes. The USLLI is updated monthly and its historical data goes back almost a century, starting in 1919, demonstrating its durability through major structural changes in the economy.

USLLI growth leads turning points in the U.S. growth rate cycle, which consists of alternating cyclical upswings and downswings in economic growth. Thus, cyclical downturns in USLLI growth lead economic slowdowns, while USLLI growth upturns anticipate periods of accelerating economic growth.



USLLI growth turned down in mid-2014, correctly warning of the slowdown that started at the end of that year. It then turned up at the end of 2015, accurately ruling out recession and forecasting the upturn in U.S. economic growth that began around mid-2016. Now the cyclical direction of USLLI growth has started to reverse. (June Release)
 
The USLLI is not based on an econometric model, but is rooted in a very different paradigm. It is comprised of leading indicators reflecting the fundamental drivers of the business cycle. Unlike econometric models, ECRI's indexes are not based on data-fitting, and do not need to be tweaked or adjusted to account for new data or events, as shown by nearly a century of historical data.

The USLLI is part of the ECRI framework that covers 21 economies, incorporating indexes designed to be comparable across borders.

Related News & Events

Finding the Root Cause of Recessions

Bloomberg August 25, 2017

Two things bear most of the blame: external shocks and economic volatility. More

 

Weekly Leading Index Edges Down

ECRI August 25, 2017

U.S. Weekly Leading Index growth decreases to 72-week low. More

 

Flashback: Declining Productivity in Construction

ECRI August 24, 2017

ECRI readers have long known that manufacturing and construction productivity has been falling for six years, dragging down overall productivity growth. More

 

Interview: Jobs, Inflation & the Fed

Reuters August 4, 2017

Central banks like the Fed are misled by their belief that a lower jobless rate equals higher inflation. More

 

Phillips Curveball

ECRI July 31, 2017

It is the U.S. Future Inflation Gauge – not the Phillips curve – that provides early warning of an inflation upturn. More