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Real-time economic data is in great demand. Everyone wants to know what is happening in the economy right now. For this purpose, we have been following the Weekly Economic Index(WEI). The index was created by researchers at Harvard, the New York Fed, and the Dallas Fed. It compiles 10 data sources to compute a measure of real-time economic activity. Those data points are: same-store sales, consumer confidence, new unemployment claims, continued unemployment claims, income tax withholdings, railroad traffic, staffing levels, steel production, fuel sales, and electricity usage. The index calculates a weekly reading that reflects the levels of each of these data points. We know the economy surged in May and June as virus levels dropped. We also know that surge is ebbing as virus levels rise. The WEI reflects this pattern.
It bottomed out in late April and had been rising steadily ever since, until a drop last week, largely because of the increase in unemployment claims. Fuel sales and electricity production also decreased. Those declines offset increases in railroad traffic and tax withholdings. To give context to where the WEI stands now, it is still significantly below its lowest reading during the 2007-2009 Great Recession. However, that recession lasted longer than the current one. Even though the economy is a long way from being recovered, it is likely growing now, meaning the recession is likely technically over.
–Curtis Dubay, Senior Economist, U.S. Chamber of Commerce |
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