Posted on 10/06/2008 9:17:47 AM PDT by rightinthemiddle
Bailout plan expected to take the edge of the recession, NABE survey shows
WASHINGTON (MarketWatch) -- The U.S. economy will recover from the current recession in the second quarter of next year, assuming the credit squeeze in global financial markets improves gradually, according to a survey of 48 economists released Monday.
The survey by the National Association for Business Economics shows respondents expect virtually no growth in the current quarter, followed by a 1% increase in the first quarter of the year. The economy could return to a healthier rate of growth, pegged at around 2.7%, by the second quarter.
The unemployment rate would rise to 6.4%, the survey says.
Two out of three economists surveyed say the economy is in recession.
Their forecast is highly dependent on what happens to credit markets, however.
"If financial conditions fail to improve quickly, near-term economic prospects could deteriorate markedly," said Chris Varvares, president-elect of the economists' group and the president of Macroeconomic Advisers, a top forecasting firm.
"Still, the NABE panel expects that lower oil prices, a bottoming out in home prices, and a better functioning of financial markets should enable the economy to resume trend-like growth by the second half of 2009," Varvares added.
(Excerpt) Read more at marketwatch.com ...
Spring, 2018
assuming the credit squeeze in global financial markets improves gradually...
Yes, and I will buy a mansion in the Hamptons in spring, assuming I win the California Lottery.
LOL! Brilliant.
Economists are kinda like weather forecasters!
lol. That soon?
I’m no economist, but it seems to me that Citigroup and Wells Fargo would not be fighting over Wachovia if the future was as grim as the MSM makes it out to be.
What did these professors have to say 6 months ago about now?
I dunno. I don’t even work here.
What they don't tell you is that if Obama gets elected than we'll have more of a european recovery curve ... 18 months instead of 6.
Just in time for the next President to take the credit!
Your thoughts?
Typical economists. If the credit situation improves, then we might be out of a recession in Q309.
If it doesn’t, then things get worse.
Golly, that takes a whole lot of PhD’s to arrive at that prognostication.
They should quit worrying about the economy and start worrying about the bond market. Get that sorted out first, and then positive progress will follow at its own rate.
Without the bond market, all talk of how long/deep/bad a recession is pointless blather.
And if Obama wins, the Dems will take credit for the recovery.
I don’t know what these economists predicted.
It’s just like ‘Being there’
President “Bobby”: Mr. Gardner, do you agree with Ben, or do you think that we can stimulate growth through temporary incentives?
[Long pause]
Chance the Gardener: As long as the roots are not severed, all is well. And all will be well in the garden.
President “Bobby”: In the garden.
Chance the Gardener: Yes. In the garden, growth has it seasons. First comes spring and summer, but then we have fall and winter. And then we get spring and summer again.
President “Bobby”: Spring and summer.
Chance the Gardener: Yes.
President “Bobby”: Then fall and winter.
Chance the Gardener: Yes.
Benjamin Rand: I think what our insightful young friend is saying is that we welcome the inevitable seasons of nature, but we’re upset by the seasons of our economy.
Chance the Gardener: Yes! There will be growth in the spring!
Benjamin Rand: Hmm!
Chance the Gardener: Hmm!
President “Bobby”: Hm. Well, Mr. Gardner, I must admit that is one of the most refreshing and optimistic statements I’ve heard in a very, very long time.
[Benjamin Rand applauds]
President “Bobby”: I admire your good, solid sense. That’s precisely what we lack on Capitol Hill.
Looks like they’ve been right. From May 2008:
NABE Outlook: The NABE Panel Sees More Near-Term Weakness, but Still Expects a 2009 Upturn
October 2008
SUMMARY: “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, NABE President-elect and president of Macroeconomic Advisers. “If financial conditions fail to improve quickly, near-term economic prospects could deteriorate markedly. Still, the NABE panel expects that lower oil prices, a bottoming out in home prices, and a better functioning of financial markets should enable the economy to resume trend-like growth by the second half of 2009.”
Highlights
* The NABE panel has sharply lowered its expectations for near-term economic performance.
* Despite the median forecast of no quarterly decline in GDP, two out of three economists now believe that a recession has already begun or will begin before 2008 is over.
* In a supplemental survey taken October 1-2, the panel expressed concern that the recent deterioration in credit markets could significantly weaken the economy.
* The panel expects economic growth to revive as 2009 progresses.
* Deteriorating near-term growth prospects are expected to lead to more job losses and higher unemployment than expected by the economists last May.
Let me rephrase that: “Kinda” right.
“Prosperity is just around the corner.” - Herbert Hoover
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