Sunday, 10 Mar 2013 12:21 PM

By Dan Weil

While stocks may be at record highs, a mild recession actually began in mid-2012, according to the Economic Cycle Research Institute.

That may not make a lot of sense to people, given the stock market’s surge. Indeed, in 12 of the last 15 recessions, there was a bear market, ECRI co-founder Lakshman Achuthan tells Yahoo.

But, “recession is a feedback loop between income, sales, production, and employment. It
doesn’t happen exactly the same way each time,” he says. “Each one is a bit different.”

The easiest way to understand this recession is by looking at income data, Achuthan says.
Personal income plunged 3.6 percent in January as the payroll tax increased, the biggest drop in 20 years.

While some have been quick to scoff at ECRI’s call, “in this day and age, there’s a real rush
to judgment, Achuthan says. In the severe recession of 1973-75, it took a year before “anyone figured out we were in a recession,” he says.

GDP growth, of course, is still positive – registering 0.1 percent in the fourth quarter. But in the last six recessions the average time it took for GDP to turn negative after the recession started was two quarters, Achuthan says.

The average consumer apparently agrees that a downturn already is in place.

According to an Investor’s Business Daily/TIPP poll this month, 59 percent of Americans
believe the United States is in a recession, compared to 35 percent who disagree. Those numbers are little changed in recent months.

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