February 2021 New York Fed Weekly Economic Index (WEI): Index Modest Decline Continues

The New York Fed's Weekly Leading Index (WLI) continues to show an economy that is just above the worst seen during the Great Recession. This index recovery has stalled based on the 13-week rolling average.

Analyst Opinion of the Weekly Leading Index

This data set should be considered a high-frequency coincident indicator on a par with the Aruoba-Diebold-Scotti Business Conditions Index produced by the Philly Fed - and both show conditions caused by the coronavirus pandemic are already worse than the Great Recession. However, the Aruoba-Diebold-Scotti Business Conditions Index is improving whilst the WLI is still declining. Logic would say with the partial reopening of the economy - the Aruoba-Diebold-Scotti Business Conditions Index seems to be correct.

The WEI is an index of ten daily and weekly indicators of real economic activity scaled to align with the four-quarter GDP growth rate.

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The current situation according to the New York Fed:

The decline in the WEI for the week of February 6 is due to a decrease in tax withholding, which more than offset a fall in initial unemployment insurance claims and increases in fuel sales, electricity output, and rail traffic (relative to the same time last year).

What is the Weekly Economic Index (WEI)?

The WEI is an index of real economic activity using timely and relevant high-frequency data. It represents the common component of ten different daily and weekly series covering consumer behavior, the labor market, and production. The WEI is scaled to the four-quarter GDP growth rate; for example, if the WEI reads -2 percent and the current level of the WEI persists for an entire quarter, we would expect, on average, GDP that quarter to be 2 percent lower than a year previously.

Comparision to the Aruoba-Diebold-Scotti Business Conditions Index

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Components of the Aruoba-Diebold-Scotti Business Conditions Index

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