As measured by NY Fed WEI, OECD Weekly Tracker, and Baumeister, Leiva-Leon and Sims WECI
Figure 1: Lewis-Mertens-Stock (NY Fed) Weekly Economic Index (blue), Woloszko (OECD) Weekly Tracker (tan), Baumeister-Leiva-Leon-Sims Weekly Economic Conditions Index for United States plus 2% trend (green) Source: NY Fed through FRED, OECD, WECI, and authors computations.
The WEI fell from the previous week, down to 2.1% from 2.8%, while the Weekly Tracker continued to increase. The divergence, which is not surprising, offered the large distinctions in methodologies, has closed in recent weeks. The WEI depends on correlations in ten series available at the weekly frequency (e.g., unemployment claims, fuel sales, retail sales). The Weekly Tracker– at 2.0%– is a “big information” approach that uses Google Trends and artificial intelligence to track GDP.
The WEI reading for the week ending 10/1 of 2.1% is interpretable as a y/y quarter development of 2.1% if the 2.1% reading were to continue for a whole quarter. The OECD Weekly Tracker reading of 2% is interpretable as a y/y development rate of 2% for year ending 10/1 (this series was modified downward visibly from last release).
Considering that these are year-on-year development rates, its possible we remained in a recession in H1 as one observer suggested a bit over a month earlier, but it (still) appears not likely.
This entry was published on October 7, 2022 by Menzie Chinn.
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