FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.

posted on 19 March 2016

Are We Headed Into Recession Now?

from Lakshman Achuthan, Co-Founder and Chief Operations Officer of ECRI

When we spoke with Reuters in January, we discussed how since last summer ECRI has been saying that the Fed's rate hike plans were on a collision course with the economic cycle. That realization only dawned on the consensus in January, triggering a major shift in market perceptions of the macro economy and the pace of Fed rate hikes.

At ECRI, we aren't forecasters using extrapolative econometric models. Rather, we're "monitorists," with an "I" - meaning that we monitor the indicators that best discern the current direction of the economic cycle, and those that best forewarn us when it's going to change cyclical direction.

In contrast, many analysts seem manic depressive, gyrating from one extreme view to another based on the latest data point. Those who were too complacent last year were blindsided by the economy's weakness earlier this year and overcorrected by prematurely predicting recession. This is the kind of thing that has a significant impact on rate hike probabilities.

Then the data firmed a little bit, which is why the "economic surprise indexes" turned up, and accordingly the same analysts did an about face, declaring that recession risk is gone. This is a classic example of why economic surprise indexes are so bad at predicting cycle turns, because, more often than not, turns in surprise indexes are false alarms, and false all-clear signals.

A case in point is retail sales. Last month that data showed an uptick, which the consensus quickly translated into "recession off the table." Yesterday we saw that retail sales data was revised down in a big way.

So are we headed into recession now?

Today we are not on the cusp of recession, but to be clear, the cycle also isn't about to turn up.

Regarding the cyclical direction of growth, it's obvious that , month-to-month or quarter-to-quarter gyrations notwithstanding, overall U.S. economic growth has been slowing for more than a year now, in terms of output, income, employment and sales, with yoy growth in GDP at a 1¾-year low, in nonfarm jobs at a 20-month low, personal income at a 16-month low, and IP moving towards December's six-year low.

And the prognosis is also clear: short-term gyrations aside, this cyclical slowdown will continue in the months ahead.

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical News Post Listing

Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.

You can also comment using Facebook directly using he comment block below.

Econintersect Contributors


Print this page or create a PDF file of this page
Print Friendly and PDF

The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.

Take a look at what is going on inside of
Main Home
Analysis Blog
Comments on Feyerabend’s ‘Against Method’, Part II
Comments on Feyerabend’s ‘Against Method’, Part III
News Blog
Rail Week Ending 15 October 2016 Paints A Negative Economic View
What Is The New Normal For U.S. Growth?
Affordable Care Act And Its Effect On Part-Time Employment
The Speed Of Filling Jobs Is Declining
First Working Eggs Made From Stem Cells Points To Fertility Breakthrough
Infographic Of The Day: Mega Machines
Online Platforms Double Down On TV Programming
A History Of Mars Missions
How Tesla Out Innovates Traditional Carmakers
Schiaparelli's Descent To Mars In Real Time
September 2016 Existing Home Sales Still Not Excellent
September 2016 Leading Economic Index Improves Indicating Moderate Growth Ahead.
October 2016 Philly Fed Manufacturing Survey Declines But Remains In Expansion.
Investing Blog
Options Early Assignment - Should You Worry?
The 401k Plan Manager 17 October 2016
Opinion Blog
Prop. 51 Versus A State-Owned Bank: How California Can Save $10 Billion On A $9 Billion Loan
Obama's Middle East Policy Has Been A Complete Failure - Or Has It?
Precious Metals Blog
How Will The Election Outcome Impact Precious Metals?
Live Markets
20Oct2016 Market Close: US Indexes End Flat After Choppy Session, Nigeria Slashes Oil Prices, Crude Prices Continue To Slip, Bullish Investors Not So Bullish Anymore
Amazon Books & More

.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Middle East / Africa
USA Government

Crowdfunding ....



Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day


Asia / Pacific
Middle East / Africa
USA Government

RSS Feeds / Social Media

Combined Econintersect Feed

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution



  Top Economics Site Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved