ECRI's Achuthan Says 2012 Recession Call Still Stands (CNBC, 2/24/2012)

ECRI's Lakshman Achuthan was on CNBC's Squawk Box on February 24 reiterating his call that the U.S. will be in a recession by mid-year 2012, despite the consensus view and haters saying otherwise. He made his original recession call in the media in early October 2011.

Achuthan mentioned that ECRI's U.S. Coincident Index (output, jobs, income and sales) was at a 21 month low, and said: "you haven't had a decline like that in the past 50 years without a recession following in short order." Below is a summary of the key points he made during the interview followed by the video.

  • GDP growth year-over-year peaked in Q3 of 2010, fell to 1.5% by Q2 of 2011, and has flatlined since then;
  • Personal income growth has the same pattern;
  • Broad sales growth has the same pattern;
  • Industrial production growth year-over-year as of January is at a 22 month low;
  • Jobs follow consumer spending growth, he expects jobs to flag soon;
  • The "velocity of money has dropped to a record low in the U.S., near a record low in Europe, and near a record low in China." (interesting)

See the post I did yesterday showing charts of year-over-year growth in GDP, personal income, personal consumption, retail sales, and the velocity of money (St. Louis Fed FRED data). They are rolling over.