On an annual basis, the activity growth continues to grow. Shown below is the Lewis-Mertens-Stock (NY Fed) WEI, Woloszko (OECD) Weekly Tracker, and Baumeister-Leiva-Leon-Sims Weekly US Economic Conditions Index, for data up to a few days ago (September 17):
Figure 1: Lewis-Mertens-Stock (NY Fed) Weekly Economic Situation Index (blue), Woloszko (OECD) Weekly Tracker (tan), Baumeister-Leiva-Leon-Sims Weekly US Economic Conditions Index plus 2% trend (green) Source: Bank Federal Reserve of New York via FRED, OECD, WECI and author accounts.
The WEI is down from the previous week, down to 1.8% from 2.8%, while the Weekly Tracker continues to rise. It is fair to say that there is some difference, which is not surprising, given the significant differences in the methodologies. WEI is based on correlations in ten series available in weekly frequency (eg, unemployment 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 ending 9/17 of 1.8 can be interpreted as a quarterly growth of 1.8% if the 1.8% reading continues for the entire quarter. The OECD Weekly Tracker reading of 3.8 can be interpreted as an annual growth rate of 3.8% for the year ended 9/17. The Baumeister et al. The 1.1% reading is interpreted as a 1.1% growth rate over the long-term trend growth rate. Average US GDP growth over the period 2000-19 is about 2%, which means a growth rate of 3.1% for the year ending 9/17.
Given these are year-over-year growth rates, it’s possible that we were in a recession in the first half as one observer suggested a month ago, but (still) seems unlikely.