The United States will fall back into a recession in 2012, says economist and author Gary Shilling, who accurately called the housing meltdown just a few years ago.
Calling it a double-dip recession is inaccurate, since a double-dip is defined as two back-to-back recessions separated by a brief recovery (the last recession ended in 2009 and the last business-cycle peak came in 2007).
Instead, we're headed for a fresh downturn.
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"I'm predicting another recession next year," Shilling tells MarketWatch.
Most recessions see a quick and strong recovery, but that hasn't been the case with the most recent contraction, Shilling says.
The economy, Shilling says, is like an engine, and a recovery needs all four cylinders — consumer spending, employment, housing and the reversal of the inventory cycle — to be firing.
All four aren't firing, especially the first three.
Eventually, however, politicians will find some way to fuel growth, especially in an election year.
"If the economy is still weak going into next year, we could have fiscal stimulus," Shilling tells MarketWatch.
Leaders don't "want to face voters with a weak economy."
Even if the country does avoid a new recession in 2012, best-case scenarios see the economy posting lackluster growth rates, according to an Associated Press survey of 43 private economists.
And the number of pessimists is growing: the likelihood of a recession within the next 12 months is 26 percent, while in June, the same survey put that likelihood at 15 percent, the AP reports.
"I had been saying it was half-speed recovery; now, it's a quarter-speed recovery," says Beth Ann Bovino, senior economist at Standard & Poor's, according to the Associated Press.
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