ECRI: Double-Dip Recession "Out of the Question"
NEW YORK (Reuters) - A weekly measure of future U.S. economic growth slipped in the latest week, though its yearly growth rate surged to a 38-year high that suggests chances of a double-dip recession are slim. The Economic Cycle Research Institute said its Weekly Leading Index for the week to August 21 fell to 124.4 from 124.9 the prior week. But the index's annualized growth rate soared to a 38-year high of 19.6% from 17.4% the prior week. It was the WLI's highest yearly growth rate reading since the week to May 28, 1971, when it stood at 20.5% (see chart above)."With WLI growth continuing to surge through late summer, a double dip back into recession in the fourth quarter is simply out of the question," said ECRI Managing Director Lakshman Achuthan, reinstating the group's recent warning to ignore negative analyst projections. Achuthan has recently projected that the recovery is moving at a stronger pace than any the United States has seen since the early 1980s.
HT: Al Bellenchia
4 Comments:
This is good news for the private sector economy in America. My concern is with the "government economy." The private economy shrunk far more than GDP indicated because government spending soared and it was counted as GDP even though I'm not sure what "product" is produced by the government. Government spending (fed, state, local) will account for about 45% of GDP in 2009. The private section of the economy shrank by over 10%. Due to the lag between tax receipts and actual government budgets, there will be a delay in the impact of the private economy shrinkage on the government economy. I don't think anything in the ECRI report shows what the government does. While this suggests the private economy should do well in the near term, look for GDP results to be weaker than the ECRI would suggest.
Another LEI, that confirms the ECRI.
Cheers.
Approx. .09% chance of a double dip.
www.newyorkfed.org/research/capital_markets/Prob_Rec.pdf
This article explains how the yield curve significantly outperforms other financial and macroeconomic indicators in predicting recessions two to six quarters ahead.
By Arturo Estrella and Frederic S. Mishkin, Current Issues in
Economics and Finance (2) 7, June 1996
I sure do hope the ECRI folks know what they're talking about...
The airline business could most definitely use a strectch of time to sort itself out...
Roubini warns of double-dip recession: report
Sun Aug 23, 2009 7:48pm EDT
'He said that if policymakers try to fight rising budget deficits by raising taxes and cutting spending, they could undermine any recovery...
Right now according to Bloomberg Energy prices of crude are up and natural gas in down...
Massive inflation is coming if we have a V recovery
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