NEW YORK, March 20 (Reuters) - The United States is “unambiguously” in a recession, a New York-based forecasting group said on Thursday, citing a nine-month decline in its weekly measure of the economy.
The Economic Cycle Research Institute, which correctly predicted the 2001 recession at a time when many on Wall Street still maintained a rosy outlook, said their numbers indicate the economic contraction is already under way.
Extending its weakening trend, the firm’s Weekly Leading Index fell to 130.8 in the week of March 14 from 132.1 in the prior week, revised down from 132.2.
“It is exhibiting a pronounced, pervasive and persistent decline that is unambiguously recessionary,” said Lakshman Achuthan, managing director at ECRI.
At last glance, the WLI’s drop due to unfavorable moves in most of its components including lower stock prices, higher jobless claims and interest rates, and weaker housing, said Achuthan. The index’s annualized growth rate was steady at minus 10.4 percent.
The recession call puts ECRI in line with a growing number of economists who believe the U.S. is already in recession, with some citing December as the likely start date of the downturn.
Martin Feldstein, who heads the highly-regarded National Bureau of Economic Research, has said not only that contraction is under way but also that it could be severe.
“The risks are that it could get very bad,” he said last Friday.
Reporting by Rodrigo Campos and Pedro Nicolaci da Costa. Editing by Richard Satran