A weekly gauge of future U.S. economic growth hit a year-high in the latest week, sending its yearly growth rate to an all-time high that points to a more vigorous recovery than consensus has shown.
The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index rose to 125.4 in the week to Sept. 4 from a revised 124.6 the prior week, which was originally reported at 124.7.
It was the highest WLI reading since Sept. 5, 2008, when it stood at 126.0.
The index’s annualized growth rate surged to a record high of 21.3 percent from 20.8 the previous week.
“The rise in WLI growth to a record high reinforces our earlier forecast that at least the early stage of the current economic recovery will be more vigorous than the last two,” said ECRI Managing Director Lakshman Achuthan.
Achuthan recently told Reuters that a double-dip recession is highly unlikely, and that the United States is poised for a far stronger recovery than many are projecting.
“We expect non-manufacturing employment — which is where 91 percent of us work — to be positive by year end,” Achuthan said.
“We are talking about recovery that includes jobs growth in the non-manufacturing sector, and we are talking about a recovery that includes increases in consumer spending. So, in spite of the fact that many people look at this recession as being unprecedented and unlike any other, what we’re seeing in our indexes is that there are a lot of similarities to previous recessions and recoveries,” he added.
This week’s index was pushed higher largely to stronger housing activity, according to ECRI.