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As everyone focuses on the debt ceiling and how far the politicians will take this game of chicken, the economy continues to slow.  In a recent interview Lakshman Achuthan of the ECRI, one of the few people who predicted the recession, economic recovery and the recent slow-down, still believes the economy will remain weak.  Achuthan described the environment as I have described it over the last few years.  The US economy is growing, but exogenous shocks are creating outsized risks.  The key takeaway here:

“I’d watch the growth rates of the leading indicators. The key takeaway for everybody watching is that they haven’t turned up. Until these things turn up in a pronounced, pervasive and persistent way, which you can watch; until that occurs, we are still going to be slowing. And when we’re slowing, we’re more vulnerable to unforeseen shocks or maybe foreseen shocks. Unforeseen and foreseen shocks, shocks one way or another.”

See here for the full video:

Source: Reuters

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