Dramatic growth slowdown looming for the US economy?

It may be too early to say the Weekly Leading Index (WLI) is pointing toward a recession because the downturn in growth is supposed to be "persistent, pronounced, and pervasive" to indicate a recession is coming. But this is what the early warning signs would look like. Looking closely, you can see both the beginnings of a downward trend and an apparent acceleration of the downward trend. The numbers give every appearance of being an especially significant downturn. One of the seven components of the Weekly Leading Index is equity prices, which conventional wisdom tells us are a great leading economic indicator. When the WLI goes down while equities are going higher, does the divergence tell you something big could be developing. If you think you have a particularly good insight, one way or the other, this would be a good time to position yourself financially.

Red State Patriot

Posted August 28, 2006 03:04 AM
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