We recently gathered the forward quarterly US GDP estimates from 63 economists polled by Bloomberg. Below we have plotted these 63 estimates using a line graph. The average estimates project a bottom in GDP growth of 1.1% in Q4 '07 and a steady rise to 2.6% by Q4 '08. It seems that the mainstream opinion is that the odds of a recession in 2008 are 50/50. But of the 63 economists surveyed by Bloomberg, only 2 are actually predicting a recession (2 consecutive quarters of negative GDP growth). While economists are not exactly known for their prescience, you would think that there would be more than 3% predicting a recession, making them more inline with the general consensus.
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Nex week's upcoming Unemployment Rate(UR) report will provide a sense for the risk of recession. The expected jump in the UR to 4.% is higly suggestive of economic deterioration.
The current rate of change in the UR is the highes for any start-of recesiion since 1948.
This change is typically associated with 3-month into recession.
See this graphically at "Unemployment Treshold" at
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Posted by: Will Rahal | December 28, 2007 at 02:53 PM