We note with interest ECRI’s focus on co-incident indicators and 12-month growths versus their normal 6-months smoothed approach when in defence of their recession call. We agree with their assessment on seasonality factor risks (the reason they are now highlighting 12-month growths which show a more bearish outlook than their normal 6-month smoothed growths), that is why most of the components of the SuperIndex use 12-month growths in their respective recession probability models.
Incidentally, the WLIg+1 in the below chart is unique to the other WLI growth variants in that it is a 52-week smoothed growth rate and theoretically devoid of seasonality risks. What makes it interesting is the fact it has only 1 false positive in the historical record versus the ECRI’s WLIg (6 months smoothed rate) which has 12 false positives to its name.
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ECRI WLI Growth Variants 09 Mar 12
Published 03/18/2012, 12:08 AM
Updated 07/09/2023, 06:31 AM
ECRI WLI Growth Variants 09 Mar 12
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