Economists see 14-month US recession: survey

The US economy probably went into recession in April in a downturn likely to last 14 months, according to a survey of forecasts released Monday by the Philadelphia Federal Reserve.

The 51 economists on average predicted an annualized drop in US economic output of 2.9 percent in the fourth quarter and a 1.1 percent decline in the first quarter of 2009, the Philly Fed said.

More than half of the panelists say their outlook is based on the assumption that Congress will pass a new stimulus package, with a size estimated at 211 billion dollars.

According to the forecasters, the stimulus package will begin to affect real growth in the first quarter of 2009. They saw modest growth of 0.8 percent and 0.9 percent returning in the second and third quarters, respectively, improving to 2.3 percent in the fourth quarter.

But they predicted unemployment will continue to rise to 7.7 percent of the workforce by the fourth quarter of 2009.

The results were similar to a survey released earlier Monday by the National Association of Business Economists, which predicted a 2.6 percent contraction in fourth-quarter gross domestic product (GDP) and a 1.3 percent decline in the first quarter of 2009.

The NABE panel also expected a modest 2009 rebound with growth averaging 0.7 percent next year.

"Just over 60 percent of the NABE respondents expect that the depth of the recession should be relatively contained, with a peak-to-trough decline in real GDP of less than 1.5 percent, with the balance expecting a harsher contraction," the organization said.