The bullish news from the ECRI has changed very little this week. Of note is the increasing rate of future inflation. Reuters reports:
A weekly measure of future U.S. economic growth rose slightly in the latest week, and though its yearly growth rate slipped further to an 11-week low the rise in the index points to increased economic activity in the near term, a research group said on Friday.
The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index rose to 129.5 in the week ended Nov. 27, from an upwardly revised 128.9 the prior week, originally reported as 128.8.
The index’s yearly growth rate dipped to an 11-week low of 23.4 percent from 24.2 percent, which was revised higher from an original 24.1 percent.
Though the annualized growth gauge has fallen from all-time highs touched in early October, ECRI Managing Director Lakshman Achuthan said the inverse move between the two components is “consistent with increasing economic activity in the months ahead.”
This week’s index rose largely due to stronger housing activity, Achuthan said.
The growth rate is derived from a four-week moving average, and occasionally moves inversely to the weekly index level.
A monthly gauge of U.S. inflation pressures continued to climb in November to a 14-month high, pushed up by inflationary moves in job activity and commodity prices, a research group said on Friday.
The Economic Cycle Research Institute’s U.S. Future Inflation Gauge (USFIG), designed to anticipate cyclical swings in the rate of inflation, rose to 95.7 in from an upwardly revised 93.0 in October, which was originally reported as 91.7.
It was the eighth straight month the index has risen, suggesting U.S. inflation pressures “are beginning to simmer,” said Lakshman Achuthan, managing director at ECRI.
The November USFIG annualized growth rate, which smooths out monthly fluctuations, spiked to 26.8 percent from 20.2 percent in October, which was revised higher from 17.3 percent.
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.