The U.S. economic slowdown will be more extensive and the recovery milder than previously forecast, a new survey released Tuesday by Bloomberg News indicated.
The 62-economist who responded to the March 2008 survey expect the U.S. economy to grow at an annualized rate of 0.3% in the first half of 2008, a half-percentage less than economists had projected in February 2008.
The U.S. economy grew just 2.2% in 2007, after registering 2.9% growth in 2006. In 2007, the nation's GDP totaled $13.84 trillion in 2007, not adjusted for inflation. Further, in a data point many economists consider to be indicative of additional economic slowing, last week the U.S. Labor Department announced that the U.S. economy lost 63,000 jobs in February 2008.
A factor: rising energy costs
Economists surveyed said rising fuel prices, declining payrolls, and falling home prices will decrease consumer spending and lessen the impact of the federal income tax rebate checks, which consumers will begin to receive starting in May 2008.
However, economists surveyed did not change their recession likelihood estimate. They put the risk of recession during the next 12 months at 50% in March 2008, the same percentage as the February 2008 poll.
Economic Analysis: The revised survey is more-pessimistic regarding the U.S. economy's outlook, and reflects the softening labor market conditions indicated by the February 2008 jobs report. Further, given the housing sector's deep recession and labor market softness, any increase in first-half 2008 U.S. GDP would be seen as a modest victory: some say the first-half 2008 economic performance could be considerably worse.
It's also important to point out that the above March 2008 survey was completed before the U.S. Federal Reserve's most-recent decision on March 11, 2008 to increase liquidity via the launch of its new, $200 billion Term Securities Lending Facility for 28-day loans for primary dealers, not to be confused with the separate Term Auction Facility.
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Reader Comments (Page 1 of 1)
3-11-2008 @ 12:11PM
double DD said...
Somehow everyone has their attention diverted from the actual problem. Fuel prices !!! Every individual in this country is paying for this, including American blood in Iraq. I have yet to hear from any political candidate on helping to resolve this problem. Keep your damn $1000, get the cost of fuel back to $2.00 a gallon. That's all the stimulation this economy needs !!
3-13-2008 @ 9:35PM
Chell said...
A 0.2% growth rate does not a deep recession make!