Lapcat
Governor
Lakshman Achuthan: A New U.S. Recession is Inevitable
The U.S. cannot avoid dipping back into a recession as gains in the labor market have not been enough to prevent industrial and overall economic growth from flatlining before turning downward anew, says Lakshman Achuthan, co-founder of the Economic Cycle Research Institute.
Expect the downturn to hit by late summer.
"Now that we have several months of definitive hard data, this is not a forecast," Achuthan says, according to CNNMoney. "Basically, growth has flatlined."
While industrial output, incomes and spending have been growing since the last recession, the pace of that growth is slowing, which makes a downturn unavoidable due to a lack of support.
That will be the case even if high prices don't spike higher than expected or the European debt crisis spirals out of control.
Don't call the downturn a double dip either, as too much time has passed from the last economic contraction to peg this next one as a related event.
Unemployment rates are improving, but they are just following improvements seen in other indices.
"Job growth always follows consumer spending growth, not the other way around," Achuthan says.
That also means that unemployment rates won't spike when the next recession strikes but during the downturn and continue afterward, as part of its nature as a lagging indicator.
More here:
http://www.moneynews.com/StreetTalk...y/2012/02/27/id/430623?s=al&promo_code=E44F-1
The U.S. cannot avoid dipping back into a recession as gains in the labor market have not been enough to prevent industrial and overall economic growth from flatlining before turning downward anew, says Lakshman Achuthan, co-founder of the Economic Cycle Research Institute.
Expect the downturn to hit by late summer.
"Now that we have several months of definitive hard data, this is not a forecast," Achuthan says, according to CNNMoney. "Basically, growth has flatlined."
While industrial output, incomes and spending have been growing since the last recession, the pace of that growth is slowing, which makes a downturn unavoidable due to a lack of support.
That will be the case even if high prices don't spike higher than expected or the European debt crisis spirals out of control.
Don't call the downturn a double dip either, as too much time has passed from the last economic contraction to peg this next one as a related event.
Unemployment rates are improving, but they are just following improvements seen in other indices.
"Job growth always follows consumer spending growth, not the other way around," Achuthan says.
That also means that unemployment rates won't spike when the next recession strikes but during the downturn and continue afterward, as part of its nature as a lagging indicator.
More here:
http://www.moneynews.com/StreetTalk...y/2012/02/27/id/430623?s=al&promo_code=E44F-1
