Skip to content
Little girl looking Dear readers, Catholic Online was de-platformed by Shopify for our pro-life beliefs. They shut down our Catholic Online, Catholic Online School, Prayer Candles, and Catholic Online Learning Resources—essential faith tools serving over 1.4 million students and millions of families worldwide. Our founders, now in their 70's, just gave their entire life savings to protect this mission. But fewer than 2% of readers donate. If everyone gave just $5, the cost of a coffee, we could rebuild stronger and keep Catholic education free for all. Stand with us in faith. Thank you. Help Now >

Economists predict recession will persist until midyear

Free World Class Education
FREE Catholic Classes

McClatchy Newspapers (MCT) - Harry Truman joked that he needed a one-armed economist so he wasn't faced with someone who always said "on the other hand ..."

Highlights

By Diane Stafford
McClatchy Newspapers (www.mctdirect.com)
1/5/2009 (1 decade ago)

Published in Business & Economics

Well, BNA Inc. found quite a few one-armed economists.

The business research and information company surveyed 25 economists from financial institutions, consulting firms and academia and found near unanimous agreement that the recession will persist for another six months.

All but one of the economists said economic growth will resume gradually in the third quarter _ largely depending on the success of the as-yet-unspecified federal economic stimulus package.

"We are going through some of the scariest parts right now," said John Silvia, chief economist at Wachovia Corp. and one of the participating economists. "By the end of 2009, economic growth should return."

Meanwhile, the economists agreed the job market would remain sour for several months after the real gross national product begins to tick upward.

"Jobs always lag the economy," Stuart Hoffman, chief economist at PNC Financial Services Group, told BNA.

Hoffman said he expected job losses to be "widespread," with the steepest cuts in the automotive sector.

As a group, the economists calculated that U.S. employers will continue to jettison an average of 218,200 jobs a month in the first half of the year and that the national unemployment rate will continue rising into the second half of the year.

An average jobless rate of 8.2 percent was forecast for the last six months of 2009, with individual forecasts ranging from 7 percent to 8.9 percent.

Only one economist, Susan Sterne of Economic Analysis Associates, predicted job growth in 2009.

On the brighter side, the outlook calls for inflation to be relatively low _ averaging 1.3 percent _ over the year (although two of the economists predicted a slight deflation of -0.2 percent or -0.4 percent for the year).

In terms of monetary policy, the consensus prediction was for the Federal Reserve to "keep the fed funds rate at very low levels early in the year and generally maintain that before beginning to tighten slightly late in the year."

Most of the respondents said they expected the central bank to continue pursuing monetary stimulus initiatives.

"Wherever there is a market failure, the Fed will make a market," predicted Joel Naroff, chief economist at Naroff Economic Advisors Inc.

The average forecast change, fourth quarter 2008 to fourth quarter 2009, was for:

_ Real gross domestic product: 0.1 percent.

_ Real personal consumption expenditures: 0.8 percent.

_ Real business fixed investment: -6.8 percent.

_ Hourly compensation: 2.6 percent.

_ Unit labor costs: 1.2 percent.

_ Consumer price index, overall (Dec. 2008-Dec. 2009): 1.3 percent.

_ Federal funds rate (end of 2009), 0.7 percent.

The economists also focused on the worldwide nature of the economic downturn which, they said, requires fiscal stimuli in both industrial and developing countries to avert a more severe financial crisis.

___

© 2009, The Kansas City Star.

Join the Movement
When you sign up below, you don't just join an email list - you're joining an entire movement for Free world class Catholic education.

Advent / Christmas 2024

Catholic Online Logo

Copyright 2024 Catholic Online. All materials contained on this site, whether written, audible or visual are the exclusive property of Catholic Online and are protected under U.S. and International copyright laws, © Copyright 2024 Catholic Online. Any unauthorized use, without prior written consent of Catholic Online is strictly forbidden and prohibited.

Catholic Online is a Project of Your Catholic Voice Foundation, a Not-for-Profit Corporation. Your Catholic Voice Foundation has been granted a recognition of tax exemption under Section 501(c)(3) of the Internal Revenue Code. Federal Tax Identification Number: 81-0596847. Your gift is tax-deductible as allowed by law.