It's a V! Recovery "A Lot Stronger" Than Consensus, ECRI's Achuthan Says
Posted Oct 09, 2009 11:06am EDT by Aaron Task
Related: ^DJI, ^GSPC, SPY, DIA, TBT, TLT
Good news for those worried about the economy: "We are in the early stages of the recovery and it looks to be a lot stronger" than the consensus for modest 2%-3% GDP growth, says
Lakshman Achuthan, managing director of the Economic Cycle Research Institute (ECRI).
Furthermore, the recovery will be "V-shaped" and is now "virtually unstoppable" - at least through the first half of 2010 -- Achuthan says, citing a "positive contagion" in the economy right now, based on leading economic indicators. Most notably, the ECRI's index of Weekly Economic Indicators just hit a new record high.
The cycle watcher also points out that a recovery, by definition, doesn't just mean GDP goes positive. "It must include jobs growth and consumption," which Achuthan says will start to recover by early 2010, at the latest.
That's not to say Achuthan is ignoring the "laundry list" of negatives, which he says "will take the shine off" the rebound -- and he's not forecasting good times beyond the first half of 2010. But for now, the "train has left the station" on the recovery, he declares.
In the accompanying video, Achuthan explains how the ECRI puts together its index of leading indicators, but the important thing to remember is they have a stellar track record of forecasting both recessions and recoveries.
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