| 08 July 2010
Each Friday ECRI updates their economic indicators. As we published in the Mother Loaf (Contact Klaraos for a copy) last week the ECRI Wkly Growth Rate index for the US economy has been nose diving since late 2009 and in May the descent really got going again. In the about time category, beginning the week of June 11th the descent has begun to slow. 
As long as the red line (7 week moving average) is downward sloping and below the yellow line (13 week moving average) the potential for a second leg down in the economy will remain high as well as the opportunity for government intervention, which that will is slowly beginning to fade along with h There has been a lot of attention focused on ECRI’s WLI index lately and if it is predicting simply a growth recession, or outright second leg recession. Following is a chart for ECRI’s US Long Leading Index and from the chart you can see that it has simply gone flat as of late since spiking off of the March 2009 bottom. For comparison purposes the last double leg recession was in the early 80’s when we were just coming off the Volcker years when he successfully broke the back of inflation by raising interest rates and our new Fed chairman Mr. Greenspan was beginning to drop interest rates to jump start the economy along with President Reagan’s tax cuts. What a different world we have today.
