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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 19 2013

The Triumph of Hope Over Experience, QE Edition

With stock prices reaching new record highs and home prices continuing to rise, many believe the wealth effect is steering the U.S. economy onto a clear recovery track. In this vein, Fed Chairman Bernanke testified to Congress this week that “housing has contributed significantly to recent gains in economic growth.” However, reality contradicts this hopeful view, with retail sales coming in below expectations and housing starts deteriorating.

To that extent, ECRI has just completed a study of consumer purchasing power by examining the cyclical and structural patterns of its drivers during economic expansions and contractions. While the Fed’s QE has been distorting many financial indicators, the less-biased indicators ECRI analyzes clearly show where things stand today, and where they are headed.

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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