Last fall, some U.S. economic data began to come in weak, and the stock market sold off. This prompted many economists and analysts to begin talking about the possibility of a new recession.
One analyst, however--Lakshman Achuthan of the Economic Cycle Research Institute--did not just talk about the possibility of one.
He said, definitively, that the U.S. was "tipping back into recession. And there's nothing that policy makers can do to head it off."
Well, the U.S. economy did not tip back into recession. In fact, the data started coming in better-than-expected again, and the country experienced modest growth in Q4 and Q1.
ECRI's forecasting model often antagonizes observers because it's a "black box": ECRI refuses to say what data points it includes in its leading indicators. So when the U.S. did not go into recession, Lakshman Achuthan was once again pressed for details about what went into his definitive recession call--and he was often upbraided when he refused to say.
Eight months after the recession call, Achuthan is not backing down. He says ECRI has lengthened the time frame of its initial recession call, but not withdrawn it. This despite a recovery in one of the leading indices that ECRI distributes to clients.
The U.S. will enter a recession by the end of 2012, Achuthan says. And that recession will include at least one quarter of negative GDP.
This recession will most likely be mild relative to the Great Recession of 2008-2009, but it could end up being a lot worse.
In support of this ongoing bearishness, Achuthan points to his index, which is once again turning negative.