McLEAN, Virginia: ‘If all economists were laid from end to end, they would not reach a conclusion,' opined Irish playwright and all-round wit George Bernard Shaw, a conclusion seemingly supported by a USA Today poll showing that almost half of this noble brood do not believe the US is in a recession.
The newspaper's quarterly survey of 54 corporate, academic and trade association economists found that some 51% are of the opinion the US is currently in a recession – down from a total of 67% in April – with 49% disagreeing with this statement.
According to the survey's respondents, economic growth will stall at around 0.2% in the fourth quarter, but the economy is also predicted to steer clear of negative growth for the twelve-month period to September 2009.
Mesirow Financial's chief economist Diane Swonk said: “Technically, it doesn't look like we will hit a recession even if fourth-quarter GDP growth is negative. But so what? To the majority of people, it feels like we are in one.”
Government action to combat inflation is considered to be more important than further intervention to stimulate the economy, as high oil prices and deleterious credit conditions, the main causes of the slowdown, would prove difficult to combat by further federal-level activity.
It is also predicted that inflation will calm in the next few months – with prices forecast to rise by a further 2.5% by September 2009 – and that the Federal Reserve will probably maintain interest rates at the current level of 2% when it next meets.
Data sourced from USA Today; additional content by WARC staff