Lakshman Achuthan Sees U.S. In Current Recession
Economic Cycle Research Institute's Lakshman Achuthan is confident that the economy is in the middle of a recession that most are blind to. He went over the details of this belief on Tuesday morning's Squawk Box on CNBC.
“We've called; made a call for a recession in the middle of 2012 and we're not budging from that call,” said Achuthan.
He said that as a student of the business cycle, he understands the “major revisions” that are due to come. According to Achuthan, “if you look at the half a year period from Q4 2012 through Q1 2013, annualized GDP, right now on the face of it, is at 0.6 percent.”
“And that's only because of a freak boost in agricultural inventories that had to do with the earlier drought.”
Achuthan highlighted that the benchmark revisions to GDP data that have come years after the most recent few recessions all show revisions of up to 2 to 4 full percentage points.
“Here we are in that half a year period at 0.6 [percent] on face value, and if you get rid of it with agricultural stuff, which doesn't really count, it's at [0.25] for a half a year. That is so easy to get revised away, and you'll have your negative GDP staring you in the face,” Achuthan said.
Overall, Achuthan is concerned that the current consensus of pushing GDP to three percent for 2014 is extremely unlikely.
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