Growth May Slow But "There's No New Recession Anywhere in Sight"
Posted Mar 26, 2010 01:51pm EDT by Peter Gorenstein in Investing, RecessionThe final revision is in, and the Commerce Department reported today thatthe U.S. economy officially grew at 5.6% pace in the fourth quarter of last year. However, as the Associated Press reports, many economists think that impressive growth will be cut in half this quarter.
Lakshman Achuthan of the Economic Cycle Research Institute (ECRI) isn't so sure. He admits, "2010 looks a lot dicier than 2009." However, his data shows the business cycle is currently healthy. "The growth rate after tailing off from record, record highs, is now stabilizing and inching up," he says in the accompanying clip. In fact, the ECRI’s weekly leading index just hit a nine-week high.
And, as for a double-dip recession, Achuthan says it isn't in the cards. "There's no new recession anywhere in sight. In 2010, the business cycle remains your friend," he says with confidence.
Even so, ECRI's research does show a slowdown later in the year. "The weekly leading index is pointing to an easing in growth by mid year," he notes.
The ECRI does have a good track record when it comes to predicting economic cycles. They correctly predicted last year's strong recovery after having correctly called the 2001 and 1990 recessions. However, ECRI waited until March 2008 to officially diagnose the last recession that they now agree began in December of 2007.
What about high unemployment?
That, unfortunately, won't change even as the rate of job losses continues to improve. Achuthan figures 40% of the unemployed, particularly in manufacturing, are permanently unemployable. "So, those people are displaced. The recovery is happening. It’s very real, but the economy doesn’t want their skills for one reason or another." He says, "it’s very real but economy doesn’t want their skills."
Tidak ada komentar:
Posting Komentar