Recession? Americans, economists, itrade.com say yes! Bush and his Administration say No.
February 11, 2008
The US economy will grow in 2008 and avoid a recession despite a lingering housing slump and a related credit crunch, White House economists said Monday. The annual "Economic Report of the President" is claiming that the US economy will avoid recession and grow in 2008 contrary to what a consensus of economists believe. Citing the resiliency of the US economy and the well-publicized stimulus package passed by Congrss the report paints a rosier picture of the economy than that witnessed in a recent AP poll where 61% of Americans believed that the US was already in a recession or the trading at the online predictions market, intrade.com, where futures trading at the site are pricing in a 67% probability of a recession in 2008. The Bush administration's report stated:
"Economic growth is expected to continue in 2008. Most market forecasts suggest a slower pace in the first half of 2008, followed by strengthened growth in the second half of the year"
The report also forecasts that US gross domestic product growth (GDP) would remain at 2.7 percent in 2008 and would be 3.00% or higher in 2009. Treasury Secretary Paulson along for the ride said recently,
"I believe that we are going to keep growing. If you are growing, you are not in recession, right? We all know that"
The question here is can the happy-talk from the Bush administration and the Stimulus package save the day and hold back the tidal wave of consumer skepticism along with the slowdown in the housing and labor market. Any bets?
