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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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Weekly Leading Index Slips


ECRI U.S. Weekly Index drops to two-month low putting a crimp in the economy's recovery process, according to a weekly report on the national economy.

The Economic Cycle Research Institute said its weekly leading indicator of U.S. economic activity slipped to 121.3 in the week to July 19 from 122.2 the week before. ECRI research director Anirvan Banerji said this took the index to a two-month low.

Banerji said that while the recovery looks weak, the index does not forecast a double-dip recession, a concern for many market players.
"It is (indicating) relatively modest growth," he said. "People are expecting a double dip but it's not going to happen," he said, recalling that the behavior of the current index is similar to that during the recovery after the 1991 recession.

"The index didn't go up strongly in 1991. It hasn't gone up strongly this year and all it turned out to be (after 1991) is a sub-par recovery," he said.

The Weekly Leading Index is composed of a balance of seven major economic indicators. ECRI designs short- and long-term indexes aimed at predicting business cycles, recessions and recoveries in the world's leading economies.

VIEW THIS ARTICLE ON REUTERS