NABE Outlook: Recession Watch
“U.S. economic growth is expected to slow to a crawl in the first half of 2008, said Ellen Hughes-Cromwick, NABE president and chief economist at Ford Motor Company. “While a slight majority of our panel of forecasters expects the economy to avoid a recession in 2008, growth is expected to average just ¾% before accelerating in the second half in response to fiscal and monetary stimulus.”
Highlights
- The NABE panel expects little economic growth in the first half of 2008, but anticipates a significant pickup in the second half. The 2009 outlook, shown for the first time, calls for real GDP to grow 2.9% over the course of the year.
- The panel significantly trimmed its estimates for consumer spending and housing, as well as cutting the outlook for inventory accumulation, while raising its forecasts for net exports and government spending.
- The OFHEO index of housing prices is expected to drop 4% in 2008, the first drop in its history, before edging up a scant 0.1% in 2009.
- The NABE economists look for the trade deficit to decline further in 2008.
- Consistent with its lower forecast for 2008 growth, the panel has pushed up its estimate for unemployment and the federal budget deficit.
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