ECRI Recession Call: New US Recession To Start By Mid Year
ECRI Recession Call
ECRI Stands Firm: Certain Of US Recession 2012
The Economic Cycle Research Institute, ECRI as it is more often referred to, has double downed on their recession call made last fall, and contrary to popular opinion, they now actually have more data to back it up.
ECRI's Lakshman Achuthan made the show circuit this past week reaffirming their forecast of a new US recession starting by the middle of the year. While there was some concern that the US was falling into recession in 2011, that obviously hasn't happened. But despite this reprieve with also continued better news on the jobs front, actual leading indicators, particularly the long leading indicators tracked by ECRI, continue painting a picture of the US succumbing to a new recession very, very soon.
The implications of a new recession so soon after the Great Recession ended are grim. With most key sectors of the economy not having recovered, and a few even having gotten worse, another recession is bound to add insult to injury. Worse, a new recession so soon and without most of the economy having recovered (given the extraordinarily deep and long "Great Recession") will add to the sense that we are in a Depression, an argument several economists and a few of us here have been making for a few years now.
Then politically, a 2012 recession in the US will probably be a near death experience for the Obama administration, at best. Sitting presidents seldom survive an election year recession, and given Obama's own proclamation that if the economy isn't fixed by his third year he will be a one term president, his own words are sure to be used against him in countless ads.
Why is this happening? How, in the face of trillions of dollars of liquidity from central banks around the world, and another trillion of US federal stimulus, can we be heading for another outright recession? So soon?
My opinion is that the Great Recession has not been just a very deep recession, but rather a depression, or if you will, The Second Great Contraction.
Having been mislabeled a "Great Recession" by the press and many politicos, policy makers have gone about often giving it incorrect, or inadequate, policy prescriptions. Doctors shouldn't treat a patient who actually has pneumonia the way they would a patient with just a really bad cold, but that is in effect much of what has been done - and especially so ever since the Tea Party began injecting themselves so strongly in the debate, to be blunt.
Another reason for this forecast new recession simply to do with the business cycle becoming less stable. From the early 80s up until the 2007 recession, the business cycle was in what many economists refer to as "The Great Moderation" - an era of low volatility in the economy.
Those days may be long gone.
ECRI Recession Call Strong As Ever
Economic Data Indicating Improvement?
Friday, 24 February 2012 5:19 AM ET
Insight on whether the recent economic data shows the U.S. economy is growing, with Lakshman Achuthan, Economic Cycle Research co-founder/chief operations officer, who says GDP growth peaked in Q3 in 2010 and fell by Q2 2011, and have flat-lined since then and the U.S. Coincidence index has fallen (Source: CNBC)
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GDP Data Signals U.S. Recession, Achuthan Says
Feb. 24 (Bloomberg) -- Lakshman Achuthan, chief operations officer of the Economic Cycle Research Institute, talks about the U.S. economy and recession risk. He speaks with Tom Keene on Bloomberg Television's "Surveillance Midday." (Source: Bloomberg) Watch Video
U.S. GDP 'Close to 1% in First-Quarter
Feb. 24 (Bloomberg) -- David Rosenberg, chief economist and strategist at Gluskin Sheff & Associates, talks with Bloomberg's Tom Keene about U.S. GDP and says we can expect `close to' 1 percent growth in the first-quarter. They speak on Bloomberg Television's "Surveillance Midday." (Source: Bloomberg) Watch Video
Poll Recession Depression
ECRI Stands Firm: Certain Of US Recession 2012
The Economic Cycle Research Institute, ECRI as it is more often referred to, has double downed on their recession call made last fall, and contrary to popular opinion, they now actually have more data to back it up.
ECRI's Lakshman Achuthan made the show circuit this past week reaffirming their forecast of a new US recession starting by the middle of the year. While there was some concern that the US was falling into recession in 2011, that obviously hasn't happened. But despite this reprieve with also continued better news on the jobs front, actual leading indicators, particularly the long leading indicators tracked by ECRI, continue painting a picture of the US succumbing to a new recession very, very soon.
The implications of a new recession so soon after the Great Recession ended are grim. With most key sectors of the economy not having recovered, and a few even having gotten worse, another recession is bound to add insult to injury. Worse, a new recession so soon and without most of the economy having recovered (given the extraordinarily deep and long "Great Recession") will add to the sense that we are in a Depression, an argument several economists and a few of us here have been making for a few years now.
Then politically, a 2012 recession in the US will probably be a near death experience for the Obama administration, at best. Sitting presidents seldom survive an election year recession, and given Obama's own proclamation that if the economy isn't fixed by his third year he will be a one term president, his own words are sure to be used against him in countless ads.
Why is this happening? How, in the face of trillions of dollars of liquidity from central banks around the world, and another trillion of US federal stimulus, can we be heading for another outright recession? So soon?
My opinion is that the Great Recession has not been just a very deep recession, but rather a depression, or if you will, The Second Great Contraction.
Having been mislabeled a "Great Recession" by the press and many politicos, policy makers have gone about often giving it incorrect, or inadequate, policy prescriptions. Doctors shouldn't treat a patient who actually has pneumonia the way they would a patient with just a really bad cold, but that is in effect much of what has been done - and especially so ever since the Tea Party began injecting themselves so strongly in the debate, to be blunt.
Another reason for this forecast new recession simply to do with the business cycle becoming less stable. From the early 80s up until the 2007 recession, the business cycle was in what many economists refer to as "The Great Moderation" - an era of low volatility in the economy.
Those days may be long gone.
ECRI Recession Call Strong As Ever
Economic Data Indicating Improvement?
Friday, 24 February 2012 5:19 AM ET
Insight on whether the recent economic data shows the U.S. economy is growing, with Lakshman Achuthan, Economic Cycle Research co-founder/chief operations officer, who says GDP growth peaked in Q3 in 2010 and fell by Q2 2011, and have flat-lined since then and the U.S. Coincidence index has fallen (Source: CNBC)
Related Articles
GDP Data Signals U.S. Recession, Achuthan Says
Feb. 24 (Bloomberg) -- Lakshman Achuthan, chief operations officer of the Economic Cycle Research Institute, talks about the U.S. economy and recession risk. He speaks with Tom Keene on Bloomberg Television's "Surveillance Midday." (Source: Bloomberg) Watch Video
U.S. GDP 'Close to 1% in First-Quarter
Feb. 24 (Bloomberg) -- David Rosenberg, chief economist and strategist at Gluskin Sheff & Associates, talks with Bloomberg's Tom Keene about U.S. GDP and says we can expect `close to' 1 percent growth in the first-quarter. They speak on Bloomberg Television's "Surveillance Midday." (Source: Bloomberg) Watch Video
Poll Recession Depression