Here are some indicators of the weekly frequency of the real economy.
figure 1: Lewis-Mertens-Stock weekly economic index (blue), OECD weekly tracker (tan), Baumeister-Leiva-Leon-Sims US weekly economic conditions index plus 2% trend (green).Source: New York Fed via fred, OECD, WECIAccess 3/30, and the author’s calculations.
The Weekly Tracker continued its strong gain of 2.84% for the week ended March 25, outpacing the WEI (1.47%) and WECI+2% (1.97%). A WEI reading of 1.47% for the week ended March 25 could be interpreted as a 1.47% year-on-year increase if the 1.47% reading persisted throughout the quarter. Baumeister et al. A reading of -0.03% is interpreted as a growth rate of -0.03% above the long-term trend growth rate. US GDP growth averaged around 2% over the period 2000-19, so this implies an annual growth rate of 1.97% as of 3/25. The OECD weekly tracking index reading of 2.84% can be interpreted as a year-on-year growth rate of 2.84% as of March 25.
Recall that WEI relies on correlations of ten series available at weekly frequencies (e.g., unemployment claims, fuel sales, retail sales), while WECI relies on a mixed-frequency dynamic factor model. The Weekly Tracker — with 2.84 percent — is a “big data” approach that uses Google Trends and machine learning to track GDP. As such, it does not itself depend on actual economic indicators.
If applied to Q1, the WEI reading implies 2.37% (q/q SAAR). GDPNow as of March 24th is 3.2% (q/q SAAR), compared to 1% q/q tracked by S&P Market Insights (nee Macro Advisers/IHS Markit) as of today and 2.9% tracked by Goldman Sachs (as Tuesday) .
See here for the meaning of GDPNow nowcasting and IGM median postal.
