NABE Economists Issue Gloomy Report for 2009

Washington, DC, Nov. 17, 2008--The country is in recession, and it's likely to stay there for a while.

That's part of the latest outlook from forecasters in a survey by the National Association for Business Economics (NABE).

Approximately 96 percent of the economists polled believe that a recession has started, and nearly three-fourths think it could last beyond the first quarter of 2009.

NABE economists, among other experts, predict activity will continue to shrink in both the final quarter of this year and the first quarter of next year as weary consumers hunker down further under the stresses of rising unemployment, shrinking nest eggs and falling home values.

"Business economists became decidedly more negative on the economic outlook for the next several quarters as a result of the intensification of credit market stresses and evidence of spillover to the real economy," said NABE president Chris Varvares, president of Macroeconomic Advisers.

NABE economists are now forecasting the economy to shrink at a 2.6 percent pace in the final quarter of this year and then at a 1.3 percent pace in the first three months of 2009.

The new projections marked downgrades from the association's previous survey, which called for growth of just 0.1 percent in the final quarter of this year and a 1.3 percent growth rate in the following quarter.

The picture would turn worse in 2009. The NABE economists are projecting the economy will jolt into reverse, shrinking by 0.2 percent for all of next year. If that happens, it would mark the worst showing since 1991, when the country was starting to pull out of a recession.

With the economy losing traction, the nation's unemployment rate will climb to 7.5 percent by the end of next year, the economists predict. Other analysts think it could rise to 8 percent at that time, or even hit 10 percent or higher if a U.S. auto company were to go under.

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