The U.S. economy likely slid into a recession during the middle of 2012, said economist and fund manager John Hussman.

The U.S. economy officially grew 1.3 percent in the second quarter and 2 percent in the first quarter, but such assumptions are made with backward-looking indicators, or those that capture events that have already happened.

Leading indicators, which point to where the economy is headed, paint a different reality.

Editor's Note: See the Disturbing Charts: 50% Unemployment, 90% Stock Market Crash, 100% Inflation

“In regard to a U.S. recession, keep in mind that the consensus of economic forecasters — not to mention central bankers — has never recognized the start of a recession in real-time, largely because their assessments typically revolve around a ‘stream of anecdotes’ approach that treats each new economic report with equal weight, without distinguishing leading/lagging and upstream/downstream structure,” Hussman wrote in his weekly market commentary.

“For example, we’ve noted that real consumption growth and real income lead new factory orders, which lead employment. Yet observers have already largely dismissed the soft data on income, consumption and factory orders.”

Gross domestic income (GDI), for instance, grew at an annual rate of just 0.1 percent in the second quarter, Hussman points out, adding the metric often leads gross domestic product.

Monetary stimulus measures have allowed the government to report that the economy officially remains out of recession, though income and output growth likely paint a different picture.

“The key question is whether the absence of an obvious recession should be taken as an indication that the deterioration in income and output growth can be ignored — in effect, whether we should assume that this time is different,” Hussman wrote.

“From our standpoint, the evidence from a wide variety of economic series, including but not limited to broad measures like GDI and GDP, continues to indicate that the U.S. economy most likely entered a recession in the middle of this year.”

To keep the country officially out of recession, the Federal Reserve has announced plans to buy $40 billion a month worth of mortgage-backed securities from banks, a monetary stimulus measure known as quantitative easing that pumps liquidity into the economy in a way that pushes down interest rates to encourage investing and hiring.

Some noted economists, however, point out that fiscal issues such as tax uncertainties will prompt businesses to put off expanding and hiring, which monetary policy is powerless to fix.

Meanwhile, tight lending conditions persist despite low interest rates.

“Under current conditions, the Fed’s new policy is not likely to strengthen the economic recovery. Mortgage rates are at record lows and home sales are already up sharply. Other potential homebuyers are blocked by tough credit standards (that is, by the need for a high credit score) rather than the level of mortgage rates,” Harvard economist Martin Feldstein wrote in a Financial Times opinion piece.

“Lower mortgage rates may spill over to reduce rates on corporate debt but large businesses with enormous cash balances are reluctant to invest and to hire because they fear future tax increases. Many small businesses, which depend on local banks, are unable to secure credit because their banks lack the capital needed to increase lending.”

Editor's Note: See the Disturbing Charts: 50% Unemployment, 90% Stock Market Crash, 100% Inflation