I thought, therefore, that I would pass on an item on some forecasts by people who, unlike journalists, actually know what they're talking about -- the Wall Street Journal's quarterly survey of leading economists. It's certainly not good news, except in comparison with what your local paper is reporting. A few of the consensus findings:
- GDP, which declined 0.3% in the third quarter, will hit a nasty -3.0% this quarter. It will be a little better (but still bad) in the first quarter of 2009: -1.5%. Then it will be flat (+0.3%) in Q2, and the return to modest growth in the second half (Q3: +1.6%, Q4: +2.1%).
- Employment, as we've seen in recent recessions, will be slower to recover -- they predict 7.5% in June 2009, and 7.7% in December.
- Oil is a bright spot, since the consensus is that the price will stay below $65/barrel through 2009. Inflation will be below 2%.
- Housing will stay bad (which means I'm stuck in my house for another year at least),with prices dropping another 3.5%.
Here's a write-up on the survey by one of the economists who participated in it. He's slightly more pessimistic than the consensus (he forecasts unemployment topping at 8.5%), but the main point of his piece is that the recessions of 74-75 and 81-82 are far more accurate comparisons than the 1930s.