Blue chip economists see recession this year

The U.S. economy has already slipped into recession or will do so this year, according to a forecast of economists in the Blue Chip Economic Indicators Survey released. However, the recession is not expected to be particularly deep or protracted, eased by a string of interest rate cuts from the Federal Reserve and an economic stimulus package signed into law that will put tax rebates in the hands of consumers later this year, the closely watched survey showed.
"More than half our panelists now say the economy has already entered or will slip into a recession this year," the newsletter wrote. Almost half predict an outright decline in jobs in 2008.
"Real personal consumption expenditures are expected to register the smallest year-to-year increase in 17 years, pretax corporate profits the first decline since 2001, nonresidential fixed investment the slowest growth since 2003, and total industrial production the most tepid gain since 2002," the newsletter wrote.
For all of 2008, the economy is expected to expand by 1.4%, down from 1.5% projected a month ago and 2.6% projected in September when the Federal Reserve first began to cut interest rates.
Since September, the central bank has cut its target federal funds rate three full percentage points and is expected to cut further when policy makers meet later this month.