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WORLD> America
Economists say shaky US economy may last for a while
(Agencies)
Updated: 2008-10-06 23:20

WASHINGTON - A growing number of economists believe the country [US] is on the brink of - or already in - its first recession since 2001 and that it will be longer lasting.


US President George W. Bush signs HR 1424, the $700 billion bailout package for US banks as efforts to head off a spreading global financial crisis hung in the balance, October 3, 2008 in Washington. [Agencies] 

That's part of the latest outlook from forecasters in a survey being released Monday by the National Association for Business Economics, also know by its acronym NABE.

Close to 69 percent of the economists think the economy has started or will enter a recession this year. That's up from 56 percent in a survey in May. "The general view is .... that this recession will be longer than the last two - lasting roughly one year, but relatively mild," the survey concluded. The 2001 recession started in March and ended in November. The one before that began in July 1990 and ended in March 1991.

Under one classic definition, a recession happens when the economy shrinks for two quarters in a row. The National Bureau of Economic Research, the recognized arbiters for dating recessions, uses a more complicated formula that takes into account such things as employment and income growth.

"Business economists have become more negative on the economic outlook for the next several quarters as a result of the tightness in credit markets and weakness in consumer spending, expecting growth to stall in the fourth quarter," said Chris Varvares, president-elect of the NABE and president of Macroeconomic Advisers.

"If financial conditions fail to improve quickly, near-term economic prospects could deteriorate markedly," he warned.

For all of this year, the economy's growth is expected to slow to 1.8 percent, down from 2 percent last year, the NABE forecasters predicted. Growth will turn even weaker next year at 1.6 percent, they said.

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