Forecasters See Wobbly U.S. Economy Ahead

More Economists Say Recession Has Begun Or Will Soon, But Will Be Relatively Mild

(AP)  A growing number of economists believe the United States is on the brink of - or already in - its first recession since 2001 and that it will be longer lasting.

That's part of the latest outlook from forecasters in a survey to be released Monday by the National Association for Business Economics, also know by its acronym NABE.

Close to 69 percent of the economists think the economy has started or will enter a recession this year. That's up from 56 percent in a survey in May. "The general view is .... that this recession will be longer than the last two - lasting roughly one year, but relatively mild," the survey concluded. The 2001 recession started in March and ended in November. The one before that began in July 1990 and ended in March 1991.

Under one classic definition, a recession happens when the economy shrinks for two quarters in a row. The National Bureau of Economic Research, the recognized arbiters for dating recessions, uses a more complicated formula that takes into account such things as employment and income growth.

"Business economists have become more negative on the economic outlook for the next several quarters as a result of the tightness in credit markets and weakness in consumer spending, expecting growth to stall in the fourth quarter," said Chris Varvares, president-elect of the NABE and president of Macroeconomic Advisers.

"If financial conditions fail to improve quickly, near-term economic prospects could deteriorate markedly," he warned.

For all of this year, the economy's growth is expected to slow to 1.8 percent, down from 2 percent last year, the NABE forecasters predicted. Growth will turn even weaker next year at 1.6 percent, they said.

The survey was taken before President George W. Bush speedily signed an unprecedented $700 billion financial bailout into law on Friday shortly after Congress completed action.

The plan would allow the government to buy bad assets from banks and other institutions to shore up the financial industry. The rationale behind this is that by taking these toxic debts off financial companies' balances sheets, they'll be in a better position to raise capital and more inclined to boost lending.

The credit clog, which has intensified in recent weeks, has roiled Wall Street and poses a grave danger to the economy, warned Federal Reserve Chairman Ben Bernanke, who backed the bailout measure.

Still, even with the bailout, many analysts predict more pain ahead. Employers will keep cutting jobs and the unemployment rate - now at 6.1 percent - will climb higher. In September alone, the economy lost 159,000 jobs, the most in more than five years, the government reported Friday.

The survey of 48 forecasters was taken Sept. 8 through the Sept. 19; some supplemental questions were taken on Oct. 1-2.

[txgrouch2006]

Remember that TV show, "The Waltons?"

Remember Grandma and Grampa living with their grandchildren?

Yah, THAT WILL BE US from now on.

THANKS CONGRESS for making us ALL the Waltons.

Good night, Erin. Good night, John Boy...

[txgrouch2006]

When are we going to have hearings on Fannie Mae and Freddie Mac''''''''s role in the financial crisis?

Contact your congressman and demand a hearing. Let''''''''s see which politicians really represent the American taxpayer and the middle class.

Posted by talk2chief at 11:08 PM : Oct 06, 2008

Those hearings were ALREADY held five years ago.

Barney Frank and cohorts opposed stronger regulation of these lenders because that might interfere with their "affordable housing" agenda.

THIS MELTDOWN WAS CAUSED BY THE "AFFORDABLE HOUSING" AGENDA.

THIS IS AN "AFFORDABLE HOUSING" CRISIS.

But look at the partisan holes BLAMING THE REPUBLICANS for what Barney Frank did to our country. And our future.

[txgrouch2006]

There could be a whole new wave of people losing their homes due to job loses because they can not sell into a bad market.
Posted by sjc_1 at 01:26 AM : Oct 07, 2008

More like ABANDONING their homes as the market value falls below the mortgage pay-off amount.

That''s what happened in the 1980''s during the LAST housing crash due to reckless home lending.

Yes, kiddies, this has ALL happened before. Yes, kiddies, the jackholes running this countries DID know better. Yes, kiddies, THEY WANTED THIS TO HAPPEN TO US. Yes, kiddies, THIS WAS ALL DONE INTENTIONALLY, WITH FULL KNOWLEDGE OF THE OUTCOME.

And YES, KIDDIES, THE DEMOCRATS WERE BEHIND THIS JUST AS MUCH AS THE REPUBLICANS.

Blame the MORONS who think their party is somehow immune to being at fault...

[jamesetling4]

Anybody who was stupid enough to vote for George W. in 2004 DESERVES to be out of work and living in a tent.

[slim1h2o]

What is this thing the media has with understatements? Why can''''t they simply say that the economy is tanking at that the nation was ripped off by the bailout?


--------------------------------------------------------------------------------

Posted by sincityq at 06:05 AM : Oct 07, 2008


They don''t want to set off a panic. But the thing is, people ain''t stupid.

We know what''s going on, and we don''t need anything sugar coated.


We got the shaft,,,,,,

[sjc_1]

There could be a whole new wave of people losing their homes due to job loses because they can not sell into a bad market. Stay tuned...

[babooph]

Owing China trillions for the lost wars,masiive tax cuts for the rich-this trickle down is [as Rumsfeld would say] WONDERFUL !!!!!!

[libra127]

Everyone is ditching their US stocks!

Posted by Speakinup21 at 04:02 PM : Oct 06, 2008

For every stock that is sold, someone is buying! Why would anyone want to sell when prices are so low? The idea is to buy low and sell high. The buyers now are getting real bargains and will be wealthy when stock prices go up again, as they always do.

[talk2chief]

When are we going to have hearings on Fannie Mae and Freddie Mac''''s role in the financial crisis?

Contact your congressman and demand a hearing. Let''''s see which politicians really represent the American taxpayer and the middle class.

[hypnotoad72]

CBS immediately shut down the comments on that one...

Posted by inventagod2
----

Bit of a pity, but so many peoples'' comments were so blistering, I cannot blame them.

[lovesamerica]

economy started its fall during the Clinton era,HE was the one to push deregulation, and outsourcing. When Bush took office,we had 9/11,that threw our economy into a tailspin that has been fed by disaster after disaster. Our trouble is not having forseen that potential.

[keating54u]

www.keatingeconomics.com

McCain Received $166,000 In Campaign Contributions from Charles Keating and his Associates.

McCain Used Keatings Private Planes on Nine Occasions

McCain Had Direct Financial Ties To Keating

When the story broke, McCain did nothing to help himself. ''You''re a liar,'' McCain said

when asked about the investments. He challenged reporters saying, ''It''s up to you to find that out, kids......

[whitemale08]

What an understatement!!!

The economy is has been incapacitated by these worthless ''derivatives'' that number in the 100''s of trillions.

Again, CBS and all of these News sites need stop with the happy talk and level with the people that the United States is broke and that the entire Global Financial System has to be revamped from scratch.

[inventagod2]

This was as stellar a story as the CBS feature on the Pope saying ''Money is Nothing''...

CBS immediately shut down the comments on that one...
Seems some guy in Italy who wears ermine frocks and rides in a million-dollar popemobile said money doesn''t matter...

[renonv5]

Boy, these forecasters are real crackerjacks. So glad to have them on the job so they can let us all know the obvious. It is hard to believe anyone actually printed this story.

[silver1237]

No surprises here, everyone benefited from the past everybody knew it was happening and nobody was willing to stand up to wallstreet and the banks and do something about it. Now we all want to blame somebody or some party for it, that''s the stupidity.
If you could not pay for it you sould not have bought it, and you should not look for someone to bail you out. No matter if you''re a common citizen or a Bank.Prosperity comes at a price and sometimes needs to correct itself. So let''s quit the blame game and get on with the correcting, so our kids and grandkids have something to look forward to that thier proud of.

[jimmy3489]

I hope the right people get in the whitehouse. We can''t afford tax and spenders.Check out PitbullPalin.org for some show your vote.

[ubrew12]

"Forecasters See Wobbly U.S. Economy Ahead"..............

SHAWNP20 said: "NO S H I T???????? "

This is why they get paid the Big Bucks...

[shawnp20]

"Forecasters See Wobbly U.S. Economy Ahead"..............

NO S H I T????????

[noloyalisti]

What was the corporate welfare for? Watch the white wing wackos start blaming Clinton and the Democrats for the Government of Pigs (GOP) failed economic policies of Ray Gun and Bushoccio.