In the Economy section you refer to the "ECRI" that comes out every Friday. What do the letters stand for and where is it reported? Thanks for the discussions on "supply side economics", it's making some sense to me now. (June 19, 2004)

  ECRI is the acronym for Economic Cycle Research Institute. It is a private entity that studies various aspects of the US and other world economies such as acceleration and deceleration and inflation prospects. The Conference Board puts out the LEI (Leading Economic Indicators) made up of a basket of 10 indicators. ECRI looks at several more indicators it has determined, after extensive study, give a faster and more accurate indication than other similar methods. By faster we mean it provides a more timely indication. The accuracy is historically proven with accurate calls of the 2001 recession, the end of the 'Goldilocks' economy back in June 1999, and the Japanese recovery.

It has an impressive track record looking back, but it has a lot of the same problems of other indicators during the heat of battle. It gives indications, but you have to put them in context and figure out why they are showing what they are showing. Back in 2002 we were seeing an upturn in many points in the economy, but the ECRI was overstating some continuing slowdown. While it was picking up some of the same signs of improvement, they were overweighted by some continuing problems that were still worsening. Thus it blurred the potential recovery that was developing. ECRI was still pessimistic as we were turning optimistic. We received a subscriber question at the time regarding that discrepancy, and our answer was the same: ECRI offset the improved indicators with some that were still declining though they may have been a bit more lagging.

Nonetheless, it is a good indicator, particularly when looking at the trend. Right now it still shows a continuing decline in the annualized 4-week growth rate. It was down for the fifth straight week to 3.6% from 4.1%, a 13 month low. That is forecasting continued expansion, but at a slower pace in the second half. If the economy is not growing as fast, that puts pressure on stocks to advance their prices.

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