Analysts pare expectations for U.S. recovery

NEW YORK – The nation’s current economic slump will be deeper and the recovery weaker than previously thought, analysts said in the monthly survey released today by Bloomberg News.
Economists now expect the U.S. economy to grow at an annual rate of 0.3 percent in the first half of the year, rather than the 0.5-percent growth they predicted last month, based on the median estimate from a survey of 62 analysts polled between March 3 and March 10. For the second half of the year, the survey predicted an annual growth rate of 2.2 percent, down from last month’s 2.4-percent prediction.
The economists trimmed their full-year forecast for U.S. economic growth – measured by the gross domestic product – to 1.4 percent, the slowest since the nation’s last recession in 2001. They also lowered their forecast for consumer spending, and raised their predictions for consumer prices and unemployment. But they still pegged the odds of a recession in the next 12 months at 50 percent, the same as in the February survey.
“We’re going to get recession and inflation,” John Ryding, chief U.S. economist at Bear Stearns & Co. in New York, told Bloomberg Television. “The best-case scenario is two to three [calendar] quarters of mild recession, followed by a tepid recovery.” Going forward, “We’re now more pessimistic about the pace of recovery into 2009, Richard Berner, co-head of global economics at Morgan Stanley in New York, told Bloomberg News. “We now see the Fed pursuing a slightly more accommodative path for monetary policy than just a week ago.”