When the pandemic hit the US economy in March, most leading economic indicators lagged behind. Monthly or quarterly data were especially and extremely slow in reflecting the stock market tumble and the real-time industrial conditions. In response to the need of faster data, New York Fed compiled ten weekly economic indicators and built a composite “Weekly Economic Index”, which reflects the macro economy more timely than conventional data.
1. WEI’s composition
New York Fed publishes Weekly Economic Index (WEI) every Thursday and revisions on Tuesday. WEI is composed of 10 weekly economic indicators that are highly indicative of the real economic conditions. The following are the components:
Regarding consumption: Redbook same store retail sales index (YoY), and Rasmussen Consumer Index
Among all, ASA Staffing Index, weekly jobless claims, steel production and rail traffic have larger weightings than the rest. You can find charts of these fast-moving data in Macro > US.
2. How to interpret it?
WEI can help us better predict the results of conventional data such as nonfarm payroll, industrial production and GDP and better reflects short-term volatility.
When it goes up, the economy is recovering/growing. When it goes down, the economy is worsening/contracting.
WEI reached bottom in late April and kept rising as the stock market recovered and the US economy progressively reopened. Retail sales, rail traffic and steel production are also steadily on track to recovery. View these data in Macro > US.