Courtesy of Mish.
In 2006-2007 I called for a recession. We got a big one. I called for another one in 2011, as did the ECRI. That recession never happened.
50% is not a very good recession predicting track record except in comparison to consensus economic opinions that have never once in history predicted a recession. Consensus opinion is batting a perfect 0.00%
Investigating the Record
By the way, the ECRI was late in calling the recession of 2007. They still deny it. And questions regarding the 2001 recession and ECRI have still not been answered.
I have talked about all of this before, and it’s worth a recap, if for no other reason than to note the difficulty of calling recessions in real time.
November 29, 2012: ECRI Sticks With Recession Call
October 13, 2009: A Look at ECRI’s Recession Predicting Track Record
That third link above seriously calls into question the ECRI’s recession calling capabilities.
I am not calling out just the ECRI. Open up the middle link and you will find this statement by me:
“The ECRI is sticking with its ‘US is already in recession’ call based on four coincident indicators. Very few agree, but for what it’s worth (perhaps nothing) I am one of those in agreement.“