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Daily Archives: December 31, 2011

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The US is still under recession watch

In the last summer, David Rosenberg made the recession call – he’s 99% sure the US will slip into recession. Despite a very volatile second half of 2011, the recent data on unemployment, consumer confidence and housing sales all seemed to indicate the US economy is getting better.

But according to the leading economic indicator, shown below, the US economy is still pretty much under recession-watch territory.  Since late 1960s, the indicator only missed once in predicting the onset of recession — the second half of 2010.  In other words, at the current level of the index, there is a very high risk that the economy is likely to head down, not up. So will the indicator miss the target again, or we are indeed heading into another recession in 2012?

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In the following video interview, the author of ECRI leading indicator explains to Bloomberg’s Tom Keen why he thinks the US is still not out of woods yet.