The 62-economist survey expects the world's largest economy to grow just 0.5% in Q1 2008, Bloomberg News reported. Meanwhile, the 2008 recession probability was increased to 50%, up from 40% in January 2008.
Economist Steve Affinito, who did not partake in the survey, told BloggingStocks Friday that 2008 looks like it will be the roughest election year, from an economic standpoint, since 1992.
Bearish, bullish forces
"We've got major contraction forces in the housing slump, the credit market crunch, and in high oil prices. Any one of those could cut growth substantially. Taken together, they can flatten economic activity," Affinito said. "On the stimulus side, we have 225 basis points of Fed rate decreases and a $168 billion fiscal stimulus package, so 2008 is shaping up to be a battle royal, economically speaking."
At this juncture, the bearish forces are stronger, Affinito said, which is why he's projecting 2008 U.S. GDP growth of 1.3-1.8%.
Further, Affinito said 2008 is likely to be "the economy's poorest performance in an election year since 1992," when employees and businesses did not begin to see the benefits from an ongoing economic recovery until late in the year. "It was a difficult economic circumstance that hurt incumbents running for elected offices that year," Affinito said.