Forecasting cyclical turning points in the economy (and inflation) is job one at the Economic Cycle Research Institute (ECRI), a New York consultancy. In fact, it seems to do so rather well, or at least it has in the past. Notably, ECRI has earned some well-deserved praise in recent years for correctly predicting the 2001 recession.
But the current downturn has been a little trickier. True, ECRI was warning of trouble in late-2007. Even so, the firm held out hope that a recession might be sidestepped. As discussed in a November 2007 report, ECRI explained that “the leading indexes are not yet in a recessionary configuration, thus a recession can still be avoided.” Alas, it was not to be. With the clarity of hindsight, we know that the recession began in December 2007, as per NBER’s official (albeit 12-month lagged) dating of the downturn’s start.