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.


How is ECRI's approach different from that of other forecasters?

Most economists use models that reduce a complex economy to a rigid set of largely backward-looking relationships. Simply put, they try to predict the near future based on what has happened in the recent past. This can work for a while – until the critical moment when a turning point approaches, and such models reliably fail. This is because extrapolating from the recent past is a sure-fire recipe for being surprised by the next turn.

A century-long tradition of business cycle research gives ECRI a singular perspective on the ebb and flow of the economy, even in the face of unexpected shocks. Our approach is informed by the fundamental drivers of economic cycles. It is an approach pioneered by ECRI's co-founder, Geoffrey H. Moore. Building on that foundation, by the late 1990s ECRI had developed a sophisticated framework for analyzing international economic cycles that remains at the cutting edge of business cycle research and forecasting.

Learn more about the ECRI approach.

Why does ECRI's approach work?

Unlike mainstream economists, who base their forecasts on econometric models, we have developed a robust leading indicator approach (not based on regressions or correlations), which is unrivaled in making accurate calls of turning points in economic growth and inflation worldwide.

Separately, ECRI is a truly independent research institution that is known to be objective and non-partisan: we have a broad membership base and are not constrained by dominant academic paradigms, political ideologies, or support from special-interest groups.

Learn more about the ECRI approach.

View our track record.

How can ECRI help me manage risk?

Cyclical risk rises and falls over the course of the business cycle. We alert our members to directional shifts in the cycle so they can better time critical decisions – whether those decisions involve asset management, hiring, production and pricing, or monetary policy.

For example, when working with our asset manager members we help boost their risk-adjusted returns by timing when cyclical risk is higher or lower than most realize.

I have a specific sector interest. Can ECRI still help me?

Yes, we help our members manage cyclical risk regardless of how specialized their area of interest may be. First, a turn in the overall cycle may very well impact sub-sectors of the economy, and second, we maintain many sector-specific leading indexes.

Learn more about how we monitor business cycles.

How do I read the Weekly Leading Index (WLI) and Future Inflation Gauge (FIG) "dials" shown on the public Reports and Indexes page?

The WLI is a forward-looking indicator of turns in the economic cycle, while the FIG is a forward-looking measure of cyclical peaks and troughs in inflation. The boldest arrows within the dials reflect recent data, while the more faded arrows indicate past readings. The progression of the arrows reveals whether the cycle is strengthening or weakening.

View the WLI and the FIG.

Learn about ECRI's tradition of public service.

What is ECRI's track record?

Our track record in forecasting cycle turning points has been unparalleled for decades. The Economist magazine noted in 2005 that: "ECRI is perhaps the only organisation to give advance warning of each of the past three recessions; just as impressive, it has never issued a false alarm."

See highlights of our recession and recovery calls.

Why didn't the WLI signal recession in 2010?

We created the Weekly Leading Index (WLI) not to be an infallible, stand-alone recession-forecasting machine, but as part of a much larger array of leading indexes. Below are two consecutive detailed discussions about the WLI from 2010, and ECRI's controversial "no-double dip" recession view at the time.

WLI Widely Misunderstood, June 23, 2010

WLI (Still) Widely Misunderstood, August 4, 2010

Why does ECRI say we are in an era of more frequent recessions?

The convergence of lower trend growth and higher cyclical volatility results in more frequent recessions, keeping the jobless rate cycling around high levels.

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"eerily accurate"
- National Public Radio
ECRI [is] the most accurate forecasting institution in the world.
- Sydney Morning Herald
(ECRI's) forecast of the [Great] recession helped us anticipate reduced merchandise sales; we proactively revised our inventory forecasts down months ago, and that has helped to greatly minimize the inventory swell and need for markdowns.
- Fortune 100 Company
No one speaks with more authority about the economy's turning points.
- Fortune Magazine
ECRI is perhaps the only organisation to give advance warning of each of the past three recessions; just as impressive, it has never issued a false alarm. Jan. 2005
- The Economist
In the opinion littered world of economic forecasting, ECRI is Mr. Spock – deeply analytical, dispassionate, and accurate.
- ECRI Professional Member