UCLA Forecast: No Recesssion, Just the Cusp of One

The well-known UCLA Anderson Forecast released its first quarterly report for 2008 on Tuesday, and said it remains confident that the national economy was not in a recession through January. The group said it sees weak growth — but, noteably, no recession — during the remainder of 2008, it said in a press statement. “Our no-recession forecast remains nervously intact,” wrote Anderson Forecast director Edward Leamer, in the group’s latest report. “We see a lot of problems in the first half of 2008 as housing remains a drag on GDP growth and weakness in personal consumption contributes as well. We expect one quarter of negative GDP growth.” “Until I see evidence of a decline in spending by consumers and businesses because of credit problems, I am going to believe that this is just another symptom of ‘recession depression,'” he said. “Main Street is doing well, even as Wall Street suffers.” Senior economist David Shulman suggests the U.S. economy has “become enveloped in an ever widening and deepening credit recession, as distinguished from an economic recession, that is working to constrict borrowing to all but the most credit worthy borrowers.” He estimated credit losses at $400 million, as a result. Partly because the UCLA researchers are holding by the “no recession” call, they likewise are not forecasting a recession for California. “There has never been a recession in California without a national recession,” Ryan Ratclif and Jerry Nickelsburg, both UCLA economists, noted. For more details, visit http://www.uclaforecast.com.