ECRI: CHANCE OF RECESSION GREATER THAN 50%
Courtesy of The Pragmatic Capitalist
Well, I’m not going to lie – the ECRI has me utterly confused now. At the market peak they were calling for sustained jobs growth, a continuation in the recovery and a flat stock market (which was approximately 10% higher at the time). None of the above were right. Now they’re saying the probability of a recession is the equivalent of a coin flip. In other words, this “leading index” isn’t really telling us anything we don’t already know. My guess is that the admission of a recession won’t come until well after fact. The creators of the index have gone out of their way to tell readers why the index is misunderstood. While I’d like to give them the benefit of the doubt I am having a hard time seeing how this isn’t merely a coincident indicator.
