If you listen to the politicians, it sounds as if it is common knowledge that America is headed for a recession. Economists, however, seem less certain. 52 of 54 economists polled by Business Week did not predict a recession.
The bottom line looks like this: The economists project, on average, that the economy will grow 2.1% from the fourth quarter of 2007 to the end of 2008, vs. 2.6% in 2007. Only two of the forecasters expect a recession, although it might feel like one if there's sluggish growth over the next couple of quarters, as many predict. Almost all think the risk of a downturn has risen substantially in recent months.To see the results of the survey, go here.
As a group, the forecasters say slow growth will lift the jobless rate from 4.7% in November to 5.1%, and it will hold down inflation. As oil prices level off or decline, the yearly growth in consumer prices will slide from 4.3% in November to 2.4%, while core inflation, which excludes energy and food, will hold steady at a tame 2.2%. Profits will grow in the low single digits. Home prices will fall about 7%, but housing starts will bottom out by midyear.