Investment guru David Rosenberg warns a recession looms despite the Federal Reserve’s latest efforts to boost the economy.

The Gluskin Sheff chief economist and strategist predicts economic growth in the U.S. will turn negative sooner than most investors anticipate — setting the stage for a painful market pullback, CNBC explained.

“There’s a recession coming in the next 12 months,” he recently told CNBC.

“The economy is already slowing down,” Rosenberg said. “Earnings are actually contracting.”

However, Bloomberg recently reported that U.S. economic data are beating economists’ expectations by the most this year, offering a fresh rebuttal to last month’s resurgent recession fears fueled by the trade war and a manufacturing slump.

The Bloomberg Economic Surprise Index has reached an 11-month high after four indicators released Thursday, including existing home sales and jobless claims, each surpassed expectations. The gauge continued to advance after swinging to positive from negative on Tuesday for the first time this year. The data also pushed a similar measure produced by Citigroup Inc. to the highest level since April 2018.

“It says things are getting better,” said Jim Paulsen, chief investment strategist at Leuthold Group in Minneapolis “There’s a definitive change in the growth profile and there’s an acceleration in growth. It’s interesting how pessimistic the attitudes still are among investors, yet when you look at surprise indexes, you would think people would feel better about growth. There’s a disconnect.”

The readings are signaling a somewhat brighter mood about the world’s largest economy after some indicators and markets stoked fears last month of a quicker ending to the record-long economic expansion.

Federal Reserve policy makers on Wednesday highlighted the economy’s strength even as they moved forward with their second-straight interest-rate reduction to guard against elevated risks to the expansion. Investors are growing more upbeat too, lifting U.S. equity benchmarks back near records this month.

Paulsen also noted similar surprise upbeat readings in other parts of the world, including Europe and Japan.

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