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A Framework That Provides Clarity

During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.

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Jul 22 2013

Can the Wealth Effect Deliver Consumer Spending?

Looking to U.S. consumers to help salvage the U.S. economy, policymakers launched unprecedented monetary stimulus through QE in hopes of boosting growth via the “wealth effect.” But, despite Fed Chairman Bernanke’s testimony to Congress last week that rising housing prices have indeed upped economic activity, personal spending growth continues to hover around recessionary readings. It appears that no matter how fast the Fed tries to rev the monetary policy engine, the transmission is broken. So, if indeed the consumer is to save the day, what is the basis for these hopes?

ECRI’s latest study reconciles these competing narratives, not only providing a clear look at the current state of both consumer and, separately, corporate spending, but also analyzing the drivers of each to assess what lies ahead.

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Bloomberg Interview on Becoming Japan

Bloomberg July 30, 2013

ECRI's Lakshman Achuthan joined Bloomberg TV this morning to discuss our recession call, and how the U.S. economy is now resembling Japan's "lost decades." More