Economists Lean Closer to the R-Word

Almost half on US panel predict recession, up from 25% last year
By Jim O'Neill,  Newser User
Posted Feb 25, 2008 7:09 PM CST
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)
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(Newser) – 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.