Each Friday I post an update on the public release of data from the Economic Cycle Research Institute (ECRI). Dwaine van Vuuren, CEO of RecessionAlert.com, and his collaborators, including Georg Vrba and Franz Lischka, have developed a powerful recession forecasting methodology that shows promise of making forecasts with fewer false positives, which I take to include excessively long lead times, such as ECRI’s September 2011 recession call.
Here is Dwaine’s 2nd estimate and alert level posted in advance of Friday’s ECRI weekly update.
Thursday 13th September 2012, 2nd estimate: The Shadow WLI is considerably higher than last week at 124.6 with a growth metric of +1.67. The lower estimate for ECRI’s posting on Friday 7th Sept is WLI= 124.3/WLIg= +1.42 and the upper estimate is WLI= 124.8/WLIg= +1.92. Since the WLIg is now above its recession trigger of -2.64 and WLIg+1 is above zero we downgraded alert status from DEFCON-4 to DEFCON-5. Here is the latest snapshot.
For a detailed discussion, visit Dwaine’s Shadow Weekly Leading Index Project on his website.
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