For some time now, I have been a big fan of the Weekly Leading Index on the US economy published by the Economic Cycle Research Institute. There is so much economic data pouring out of the US that one can get easily confused about the overall state of the economy. I have found this index to be the one index that seems to encapsulate everything - "one index to rule them all", as it were.

The problem is the media and market watchers use two versions of this index - the actual index (ECRWWLI) and the YoY growth of the index (ECRWGROW), the latter being derived from the former. As to be expected, they use either one depending on which confirms the story they are trying to spin!

The purpose of this essay is to look back at US GDP growth since 1989 and see which indicator gives a more reliable and consistent account of the state of the US economy.

David Fuller's view Looking at the longer-term ECRWWLI from 1989 to this year, an encouraging recovery is underway and I would find this particularly reassuring if it were to take out the 2010 and 2011 highs.