Economists Project Weak Growth, Higher Joblessness

Location: New York
Author: RiskCenter Staff
Date: Tuesday, May 20, 2008

The National Association for Business Economics expects little economic growth in the first half of 2008 – first-quarter gross domestic product increased only 0.6 percent - and a panel of 52 NABE members look for GDP growth of 0.4 percent in the second quarter.

The panel also cut its expectations for the second half. In February, the panel projected 2.8 percent growth in both the third and fourth quarters; in May, the economists project 2.2 percent and two percent growth during those periods, respectively.

The NABE’s projection for the second-quarter unemployment rate remained at 5.2 percent between February and May, but the jobless rate projections for the third and fourth quarters increased to 5.4 percent (from 5.3 percent in February) and 5.5 percent (from 5.3 percent in February).

More panelists believe the current downturn actually constitutes a recession. In the May survey, 56 percent said the recession has already begun or will develop this year, compared with 45 percent in February who said so. Only one respondent expects the recession would last beond the first quarter of 2009.

More than 60 percent of the NABE members surveyed expect credit availability for consumers and businesses will improve in the second half. Fewer than 14 percent expect credit availability to worsen. About half believe the Federal Reserve Board’s actions on easing market liquidity successfully averted a financial crisis.

Source: http://www.creditandcollectionsworld.com/

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