Photo: Bloomberg Television
Lakshman Achuthan of The Economic Cycle Research Institute (ECRI) made waves a year ago when he said the U.S. economy would slip back into recession.Even as major economic metrics have been trending favourably, Achuthan has been sticking to his call.
Achuthan is currently speaking with Bloomberg’s Tom Keene.
He reminded Keene that earlier this year he had said “we probably wouldn’t know if we’d enter a recession until the end of the year.”
Having said that, Achuthan reiterated his call.
“We do believe we are currently in a recession.”
Many people consider two consecutive quarters of negative growth as an indicator of recession. However, Achuthan has argued that his call is based on the NBER’s definition of recession, which is based on the direction of four key economic indicators.
Doug Short of Advisor Perspectives has been following these indicators and has argued that even they undermine ECRI’s call. From Short:
Of course, the recent months for these data series are subject to revision. But at this point, economic data have consistently contradicted Achuthan’s “rolling over” assertion and claim that we’re now in a recession, a position that is rapidly becoming an embarrassment.
Here’s the chart:
Keene graciously thanked Achuthan for appearing on Bloomberg this morning. But he sent him off with one final jab.
“Come back when there’s a recession,” said Keene.
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