The housing collapse and a consumer-based recession, particularly affecting the automobile, housing and most recently the services sectors, present significant short-term challenges to the U.S. economy, according to a new report.
The Manufacturers Alliance/MAPI Quarterly Economic Forecast predicts that inflation-adjusted GDP growth will slow to 1.3 percent in 2008 before improving to 2.5 percent in 2009. GDP growth will be down an average of 0.6 percent in the first two quarters before returning to growth in the second half of 2008.
By supplying major assumptions for the economy and running simulations through the Global Insight Macroeconomic Model, the Alliance generates macroeconomic and industry forecasts.
Recessions are caused by severe shocks,” …
