Record Strength? You Heard Right
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With the economy still mired in a rut and consumer confidence struggling to rebound, the words “record high” are not something we hear very often (unless, perhaps, in reference to the job market). Which makes the surge in the growth rate of the Economic Cycle Research Institute’s Weekly Leading Indicator, the WLI, all the more impressive. “Rocketing is the word,” said Achuthan in an email.
Contrarian calls are nothing new for ECRI. Back in late 2000, when most Wall Street economists were looking for continued growth in the coming year, ECRI was a lone voice in predicting an imminent recession. Time proved them correct. In a recent presentation, managing editor Lakshman Achuthan makes a pretty convincing case for his firm’s recent forecasting record.
Now, with many economists saying a “new normal” of weak consumption and tepid growth is upon us, the folks are ECRI say wrong again:
“Given the growing strength in ECRI’s objective leading indexes, the odds are rising that at least the early stage of this economic recovery will be the strongest since the early 1980s.”
Needless to say, the group does not believe a double-dip is in the cards.
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Really eye-opening presentation, gotta love the “giant error of pessimism.”
American consumers are no longer the center of the world whatever some of our arrogant fellow citizens might think. Asia is leading the global recovery and will continue to do so for the next few months. However, V shaped recovery is possible, if due to the weak US dollar, the country exports itself out of the misery and jobs are created here. However, due to the country’s human resource policies (sharp education budget cuts affecting production of US skills and caps on skilled immigration) more of these jobs could move abroad, and despite possible very high economic growth, unemployment may remain stubbornly high.
The amount of hate that ECRI is getting is telling — lots of people didn’t buy into this market rally and so want it to fail. ERCI likely made the right call on the cycle — again.