WEI said annual growth was accelerating slightly through the end of the year.
figure 1: Lewis-Mertens-Stock Weekly Economic Index (blue) and Baumeister-Leiva-Leon-Sims US Weekly Economic Conditions Index plus 2% Trend (green), all annual growth rates in %.Source: Federal Reserve Bank of New York fred, WECIaccess 1/4, and author's calculations.
The WECI +2% as of 12/30 was (2.13%), while the WEI reading was 2.44%. If the 2.44% reading persists throughout the quarter, the latter could be interpreted as a year-over-year increase of 2.23%.this Baumeister et al. A reading of +0.13% is interpreted as growth above the long-term trend growth rate of 0.13%. The average US GDP growth rate during 2000-19 was about 2%, so this means that the annual growth rate as of 12/30 was 2.13%.
Recall that the WEI relies on ten series of correlations for which weekly frequency is available (e.g., unemployment claims, fuel sales, retail sales), whereas the WECI relies on a mixed-frequency dynamic factor model.
When added to the monthly indicators and instant forecasts shown yesterday postal According to the business cycle indicators followed by the NBER BCDC, it is difficult to believe that a recession will occur in 2023.
