The ECRI’s leading economic indicator rose to a 10 week high as the annual growth rate appears to be stabilizing at a very high level. The Weekly Leading Indicator rose to 131.9 from last week’s reading of 131.4. The annual growth rate rose to 13.9% from 13.8% (Morgan Stanley sees this as a potential negative for markets). Lakshman Achuthan, managing director of ECRI, says the recovery will remain robust in the coming months:
“With the WLI holding near January’s all-time high, the ongoing U.S. economic revival will prove resilient in the months ahead.”
The ECRI also reported their monthly measure of inflation and the indicator is beginning to show signs of broad price inflation. The U.S. Future Inflation Gauge rose to 102.1 from 99.4 in February. Achuthan says the price increases are part of the cyclical recovery:
“With the USFIG at an 18-month high, underlying inflation pressures remain in a cyclical uptrend. The gauge was pushed up in March by inflationary moves in almost all components.”
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.