U.S. to experience near recession

Thursday, 13 September 2007, 07:00 Hrs
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Los Angeles: The US will experience a near recession situation in the final quarter of the year and the beginning of 2008, according to a new study on the country's economy.

The country's economic growth is expected to hover slightly above one percent, said the study released Wednesday.

The study by economists at the University of California in Los Angeles said that in the meantime, however, the unemployment rate would likely reach 5.2 percent by mid-2008, up from the current level of 4.6 percent.

"Such an economic performance is almost as close as you can get to avoid the technical definition of a recession, which is a two consecutive-quarter decline in real GDP," economist David Shulman wrote in the latest UCLA Anderson Forecast.

Economists predicted that economic growth for the nation would remain tepid for much of 2008 but bounce back to normal levels in 2009.

While the economists called their forecast a "near-recession experience", they warned that the situation could worsen.

"Of course, when the economy slows to a one percent pace, it runs the risk of falling into an actual recession just as when an airplane's velocity dips down to its stall speed it falls out of the sky," Shulman wrote.

Despite that warning, economists said they remain optimistic that the nation will weather the storm and avoid a full-blown recession, noting that a strong global economy will lead to an increase in exports.
Source: IANS
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