Lakshman Achuthan of ECRI told Bloomberg Radio this morning the US is “tipping into a new recession.”
He told Tom Keene that a recession is the “overwhelming message coming out of our forward-looking indicators.”
And more ominously: “It is not reversible.”
“There is virtually nothing that can be done to avert what is going to happen,” he said.
Achuthan cites “dozens of leading indexes for the U.S.” and “contagion in what is going on among those leading indicators. It’s wildfire, it’s recessionary, it is not reversible.”
He says that he cannot be sure when the recession will begin — or even if it has begun already — arguing, “this is not a double-dip” because the U.S. very clearly came out of the last recession. The best-case scenario is for a short recession, lasting about 6 months. However, he noted that he’s seen no indicators pointing to a turnaround yet.
What’s more, he told Keene that this quick succession of recessions “is very consistent with shifting into an era of more frequent recessions.”
As for the severity of this oncoming downturn, Achuthan says we just cannot know yet how bad things are going to get. “Whatever the shocks are that you’re worrying about today, this morning, if they don’t happen you’re still going to have a recession, and if they do happen it’s going to get a lot worse.”
He added that he “wouldn’t be surprised” if unemployment rose to double digits, and said that exports — which had held up the economy earlier in the year — were about to go down the tube.
A recession, in Achuthan’s terms, happens when “sales disappoint, so production falls, so employment falls, so incomes fall, and then sales fall again.” He clarified, “When I call a recession…that means that process is starting to feed on itself, which means that you can yell and scream and you can write a big check, but it’s not going to stop.”
Achuthan has a great track record. In Summer 2010, while the market was diving, he insisted there was no recession on the way.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.