The Economic Cycle Research Institute finally threw in the towel on its off-the-mark 2012-13 recession call earlier this month. But given the firm’s stellar long-term track record, ECRI’s take on where the economy is heading now — and why it missed the mark on its recession call — are important to understand.
Lakshman Achuthan, whose Economic Cycle Research Institute has a strong track record of calling economic expansions and recessions, has faced a lot of criticism for ECRI’s contention that the U.S. is in a recession that started in mid-2012. But he and the group are not wavering. “We’re not budging from our call,” Achuthan told Business Insider in an email. “Looking back, the epicenter of the recession was the half-year spanning Q4 2012 and Q1 2013, which saw just 0.6% annual GDP growth, mostly from a freak jump in agricultural inventories (w/out which it would be 1⁄4 percent).” He also says […]
Lakshman Achuthan of the Economic Cycle Research Institute continues to say that the U.S. is in a recession that began in the middle of 2012. Achuthan tells Bloomberg Surveillance that initial GDP readings are often revised downward by 2% to 4% during recessions, meaning the weak growth numbers we’ve seen over the past year or so could actually be revised into negative territory. As for the strong manufacturing data coming from the Institute for Supply Management in recent months, Achuthan says the correlation between ISM’s manufacturing reports and actual production has “collapsed” in recent years. He thinks markets have become […]
Lakshman Achuthan of the Economic Cycle Research Institute is standing by his previous call about the U.S. having entered recession in the middle of 2012. Achuthan tells Bloomberg Surveillance that, while home prices have increased, “that does not mean you don’t have a recession.” He also says rising housing prices do “not mean an upturn in construction activity.” He says recessions are defined using four areas: production, employment, income, and sales. Both production and income peaked in July, he says.
Lakshman Achuthan of the Economic Cycle Research Institute says the U.S. is in a recession. Achuthan tells Bloomberg that jobs data is one key indicator signaling that recession is here. He also says he thinks GDP growth will be revised downward significantly for the first half of this year. Julian Callow, chief international economist at Barclays Capital, offers a counterpoint.