Economists Lean Closer to the R-Word

Almost half on US panel predict recession, up from 25% last year

By Jim O'Neill, Newser Staff

Posted Feb 25, 2008 7:09 PM CST

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Economists Lean Closer to the R-Word — Construction workers carry pipe on a site where new homes are being built Wednesday, Oct. 17, 2007, in Fremont, Calif. Home sales continue to be a weak spot in the economy. (Associated Press)

An panel of US economists leaned closer to predicting recession today after grappling with a slew of scary data, the AP reports. More than half of analysts at the National Association for Business Economics maintained that a downturn is still unlikely, but 45% expected recession in 2008; only a quarter saw a 35% chance of recession in a report last September.

All agreed that the economy will contract through June, with GDP growing at a paltry 1.8%. The group also predicted a second-half rebound due to Washington's $168 billion economic stimulus package and Fed rate cuts. Other NABE forecasts include:

The Fed will cut its federal funds rate rate to 2.5%.
The Consumer Price Index will climb by 2.5%.
Oil will drop to $84 by year's end.
Unemployment will rise from 4.6% last year to 5.2%.

Click on the links below to read more about NABE's predictions. (Read more recession stories.)

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