Saturday, Jan 10, 2008
The U.S. recession will probably be the longest since World War Two and could worsen without heavy government spending, according to a closely-watched survey of economists released on Saturday.
The Blue Chip Economic Indicators poll of 52 economists from top financial firms, major companies and academia found that most expected a tepid recovery to begin later this year, with growth returning to more normal levels in 2010.
A majority of those polled thought the recession would officially end in the third quarter of 2009, which would make this the longest downturn since World War Two.
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However, more than half of respondents thought unemployment would peak no earlier than 2010, suggesting that economic pain may linger long after the recession is technically over.
For 2009, the consensus view was that real gross domestic product would fall 1.6 percent, gloomier than the previous month’s forecast for a 1.1 percent decline. A drop of that magnitude would be the worst yearly performance since 1982.