Year after year, the activity growth continues to increase. Below are the Lewis-Mertens-Stock (NY Fed) WEI and Woloszko (OECD) Weekly Tracker and Baumeister-Leiva-Leon-Sims Weekly Economic Conditions Index for the US for data up to a few days ago (09/17):
Illustration 1: Lewis-Mertens-Stock (NY Fed) Weekly Economic Index (blue), Woloszko (OECD) Weekly Tracker (tan), Baumeister-Leiva-Leon-Sims Weekly Economic Conditions Index for US up 2% trend (green) Source: NY Fed via FRED, OECD, WECI and own calculations.
The WEI tumbled to 1.8% from the previous week’s 2.8%, while the Weekly Tracker continued to climb. It’s fair to say that there are some differences, which isn’t surprising given the vast differences in methods. The WEI relies on correlations in ten series available weekly (eg, jobless claims, fuel sales, retail sales). The Weekly Tracker is a “big data” approach that uses Google Trends and machine learning to track GDP.
The WEI reading for the week ended September 17 of 1.8 should be interpreted as 1.8% year-on-year growth if the 1.8% reading were to hold for a full quarter. The OECD Weekly Tracker value of 3.8 can be interpreted as a y/y growth rate of 3.8% for the year ended 17 September. The Baumeister et al. A value of 1.1% is interpreted as a growth rate of 1.1%, which is above the long-term trend growth rate. Average growth in US GDP over the period 2000-19 is about 2%, implying a growth rate of 3.1% for the year ended September 17th.
Since these are annual growth rates, it’s possible that we were in a recession in the first half of the year, as one observer suggested a month ago, but it seems unlikely (yet).