The head of ECRI, Lakshman Achuthan, stated that he believes that the United States is already in recession.
Talking on Bloomberg, Achuthan restated that we will probably know that only at the end of the year. He mentioned that the figures for the beginning of 2008 were significantly revised to the downside. Does Bernanke have the same view of the US economy?
Achuthan forecast a recession coming in Q1 or Q2. Mike Shedlock estimated that the recession probably began in June 2012.
Achuthan says:
- The velocity of money is plunging
- The stock market doesn’t reflect the economy
- Signs are pointing to a downturn
Recent GDP figures have shown that the US economy continued growing at a slow pace in Q1 and Q2. According to ISM’s PMIs, the services sector is still enjoying growth while manufacturing is experiencing a slow contraction.
Does the Fed also think that the US is already in recession? In the press conference following the announcement of QE3, Bernanke stressed that the Fed is looking at the full picture of employment: the low participation rate and also the employment to population rate are both worrying, even if the official unemployment rate is relatively OK.
By Yohay Elam, Forex Crunch
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