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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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Feb 24 2014

Is Growth Getting Stronger or Weaker as the Fed Tapers?

As of late January, the Fed stayed committed to dismantling their economic stimulus campaign. Their rationale for keeping the taper on track was an expectation that fiscal and monetary policies, combined with businesses and consumers as well as overseas demand, would all play their parts in helping buoy economic growth. One Fed president went as far as to say “that even a third consecutive month of paltry job creation was not likely to deter the Fed from tapering again.” 

In this context, ECRI has just updated its cyclical outlook based on its leading and coincident indexes, and also including an in-depth study of business investment and consumer spending, in addition to the housing and industrial sectors. Amid widespread optimism about a near-term pickup in growth, this outlook presents a different message.

Related News & Events

Failure to Launch

ECRI February 8, 2014

As ECRI had predicted, the recent consensus that the economy was "taking off" has turned out to be dead wrong, with U.S. growth falling sharply of late. More

 

Secular Stagnation

Fox Business News January 22, 2014

GDP growth (yoy) has been less than 2% for four straight quarters, something we’ve never seen except during or right after a recession. More