Growing Green Forests

The annualized growth rate of the Economic Cycle Research Institute‚Äôs Weekly Leading Index continues moving toward positive territory, now at a 46-week high just -0.6% below the zero line. Their managing director Lakshman Achuthan recently said, “With WLI growth climbing to its best reading since July, U.S. growth prospects are rapidly reviving.” They are forecasting an end to the current recession sometime this summer. Their inflation gauge has risen in both of the last two months from a 51-year low and the ECRI sees good news there as well, “warranting neither deflation worries nor fears of an inflationary upsurge at this time.” Achuthan also pointed out at a separate interview earlier this month that “interest rates always rise when things are improving. If higher interest rates choked off recoveries, then we would always be in recession.” The weekly ECRI opinion is one of our favorite indicators here at Atlas. We hope this optimism will pan out, allowing the green shoots being discussed by many analysts to turn into a forest.