The Weekly Economic Index

The weekly economic index is a super useful (and timely) metric for economic activity. I would describe it myself but I think the official description is better than I could paraphrase:

“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, one would expect, on average, GDP that quarter to be 2 percent lower than a year previously.

The WEI is a composite of 10 weekly economic indicators: Redbook same-store sales, Rasmussen Consumer Index, new claims for unemployment insurance, continued claims for unemployment insurance, adjusted income/employment tax withholdings (from Booth Financial Consulting), railroad traffic originated (from the Association of American Railroads), the American Staffing Association Staffing Index, steel production, wholesale sales of gasoline, diesel, and jet fuel, and weekly average US electricity load (with remaining data supplied by Haver Analytics). All series are represented as year-over-year percentage changes. These series are combined into a single index of weekly economic activity.”

Best of all, we can watch this metric update once a week and get some rapid readings on the direction of the economy in a timely manner going forward.

Here’s what the WEI actually looks like:

And here’s what the WEI actually looks like from a week-over-week change perspective:

Please note that charts need a moment to load as there is a significant amount of data processing.