Zeev's Turnips Patch-No Politics (ZEEV)

[*~1Best~*]

Yep, Bernanke is a minority NABE.



re: Majority Of NABE Economists Forecast Recession

Bernanke is a former NABE. He must be the minority.




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Majority Of NABE Economists Forecast Recession
5/19/2008 9:15 AM ET

U.S. economic growth is expected to slow "to a crawl" in the first half of 2008, a top official with the National Association for Business Economists said Monday. For the first time this year, a majority of economists surveyed expect that the U.S. economy is already in or will shortly be in a recession. However, the association still expects growth to pick up in the second half of 2008, albeit at a slower pace than their previous report from February.

"Although housing and credit markets will gradually loosen their grip, U.S economic growth is expected to only slowly return to health," Ellen Hughes-Cromwick, NABE president and chief economist at Ford Motor Co (F) said in a statement.

For the second quarter of 2008, economists predict that expansion will slow to an annual pace of 0.4 percent. This follows two quarters of 0.6 percent growth rates.

For the second-half of 2008, economists with the NABE cut their growth prediction from 2.8 percent in February to 2.1 percent.

The association released their prediction for growth in 2009, predicting GDP would come in at a solid 2.9 percent.

"U.S. economic growth is expected to slow to a crawl in the first half of 2008," Hughes-Cromwick said. "While a slight majority of our panel of forecasters expects the economy to avoid a recession in 2008, growth is expected to average just three quarters of a percent before accelerating in the second half in response to fiscal and monetary stimulus."

NABE is forecasting softer than expected growth in housing and consumer spending. Specifically, they expect the Office of Federal Housing Enterprise Oversight (OFHEO) index of home prices to decline 4 percent in 2008, its first drop in the index's 16-year history. In 2009 the panel expects housing prices to tick up a mere 0.1 percent. Consumer spending is also expected to be restricted as consumers grapple with higher oil and food prices.

On a positive note, trade deficit is expected to shrink further in 2008. The weak U.S. dollar has boosted demand for U.S. exports around the world, narrowing the deficit.

The NABE poll asks 52 professional economists for their forecasts on U.S. growth. During the two-week period between April 17 and May 1 that the survey was conducted, 56 percent predicted that the U.S. is in or will enter a recession at some point this year.

In February, the majority of economists surveyed, 55 percent, believed that the United States would be able to emerge from the recent economic turmoil without seeing a downturn.

The economists predict that the Federal Reserve will leave its current interest rate at 2 percent for the remainder of the year while markets normalize. In February, economists predicted that the federal funds rate would be at 2.5 percent by the end of 2008.

At the same time the economy slows, the economists are forecasting that inflation will rise. The consumer price index is expected to tick up 3.1 percent in the fourth quarter of 2008, faster than the 2.5 percent forecast in February.