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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 13 2015

The Two-Speed Economy Shifts Gears

In what has become a recurring theme, 2015 began with economists predicting that the U.S. economy would finally take off and achieve 3% GDP growth. In fact, in recent months, expectations for a second-half rebound in GDP growth still abounded, with the weak Q1 reading labeled an outlier. With Fed policy staying accommodative, a recovering consumer was widely expected to propel the economy to “escape velocity.”

Indeed, such expectations were clearly mistaken. The current U.S. growth trajectory already reflects the two-speed economy that ECRI flagged last November as being characterized by a clear downturn in manufacturing growth, but not yet in services. Against this backdrop, ECRI’s latest research takes an in-depth look at whether the service sector is likely to continue supporting growth in coming months.

Related News & Events

Low Trend Growth, Productivity Hopes, and the Outlook

Bloomberg July 1, 2015

How long-term growth trends in productivity and hours worked help explain the long-term decline in trend growth ECRI first identified in 2008, pre-Lehman. More

 

Why the Recent Rise in Wage Inflation May Not be Good

ECRI July 1, 2015

In today's Bloomberg TV interview, ECRI's Achuthan discussed why growth in average hourly earnings data is not the "hopeful sign" for wage earners that it's cracked up to be. More