ECRI Web Framework

• ECRI Home
• ECRI Solutions
• ECRI Resources
• ECRI News
• • ECRI Reports
  • ECRI Events
  • ECRI Press
• Recession Watch
• About ECRI

ECRI

18-June-2008

ECRI has released the June 2008 U.S. Cyclical Outlook report updating of our large array of proprietary U.S. leading indexes.

With some coincident and short-leading indicators showing more strength than the consensus expected, a common view among analysts now is that the U.S. economy has averted the long-feared recession. This may be a good time to recall that it is normal for recessions to go unrecognized until they are almost over.

The key coincident indicators used to officially determine the beginning and end dates of U.S. recessions appear to have already peaked. Specifically, industrial production is 1.4% below its January high and, as of March, manufacturing and trade sales – the broadest measure of sales in the economy – is 3.1% below its October high. Real personal income also dipped in April, while payroll jobs have declined for five straight months – something never seen outside recession. Also, the 1.1% rise in the jobless rate since its March 2007 low is more than double the largest increase seen outside recession.

For many, inflation is seen as the real problem, behooving the Federal Reserve to quickly raise interest rates. But, as we have noted before, recession kills inflation – and this was true even in the mid-1970s and early 1980s (page 1-3).

Thus, for now, the key issue remains recession, with spikes in oil and food price inflation acting as new shocks with the potential to turn a mild recession into something worse.

This month’s report also includes a detailed Focus report on our U.S. Coincident and Long Leading Indexes (pages 4-7).