ECRI Says New Recession Now Inevitable

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Karl Smith looks at the latest housing and manufacturing data and feels optimistic:

There is no indication at the moment that construction is headed for contraction and the probability that manufacturing is contracting is headed downward. Thus, I believe a double-dip becoming less likely.

The Economic Cycle Research Institute looks at “dozens” of leading indexes and gets ready to slit its wrists:

The U.S. economy is indeed tipping into a new recession. And there’s nothing that policy makers can do to head it off….In fact, the most reliable forward-looking indicators are now collectively behaving as they did on the cusp of full-blown recessions, not “soft landings.”

So, who do you want to believe? I’d like to believe Karl, but unfortunately, I suspect ECRI has the better of the argument. There’s just too much government stimulus coming to an end soon that plainly won’t be replaced thanks to Republican unwillingness to do anything that might help the economy before next year’s election. Obviously the stalemate in Europe isn’t helping things either. As Greg Ip says, “A global economy with decent cyclical fuel and no obvious imbalances is being betrayed by politics. Policy has pushed us over the brink in the past when it was for our own good (ie, inflation was threatening). If it happens now, it will be the first recorded instance of it happening by obduracy instead of by choice.”

We are deliberately creating a new recession. It is truly an amazing thing.

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Fact:

In-depth journalism that investigates the powerful takes real money and is so damn important right now.But it doesn’t take a Mother Jones investigation to know that billionaires and corporations will never fund the type of reporting (like they do politicians) we do that exists to help bring about change. Instead, our mission-driven journalism is made possible by people power, and has been for 46 years now since our founding as a non-profit.

In “TITLE TK” Monica Bauerlein writes about the perilous moment we’re in, and why it’s so important that we raise $325,000 by the time November’s midterms are decided so we can be ready to throw everything we have at the big issues facing the nation no matter what happens. Please help MoJo’s people-powered journalism with a donation today.

$400,000 to go!

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