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Counting on the Obama administration and Congress to come through with a substantial stimulus package of at least $675 billion over the next two years, several economists are optimistically heading into the new year declaring that the worst may soon be over.
These forecasters say such a stimulus package will get the economy moving again in the face of persistently weak spending by consumers and businesses, not to mention banks that are reluctant to extend credit, according to an article in The New York Times last week.
The paper reported the December survey of 50 professional forecasters by Blue Chip Economic Indicators found the prognosticators believe the economy should bottom out and start growing again in small steps by July.
But in the absence of that government stimulus, the grim economic headlines of 2008 will probably continue for some time, these forecasters acknowledged, according to the article.
"Without this federal largess, the consensus forecast for 2009 is for the recession to continue through most of the year," said Randell E. Moore, executive editor of Blue Chip Economic Indicators, which conducts the monthly survey of forecasters.
Many economists are more pessimistic. Nouriel Roubini at New York University, who called the 2008 market disaster correctly, wrote in a recent commentary on Bloomberg News that he foresees "a deep and protracted contraction lasting at least through the end of 2009."
Even in 2010, he added, the recovery may be so weak "that it will feel terrible even if the recession is technically over."
Roubini is not among the economists surveyed by Blue Chip Economic Indicators. These professional forecasters are typically employed by investment banks, trade associations and big corporations. They base their forecasts on computer models that tend to see the American economy as basically sound, even in the worst of times. That makes these forecasters generally a more optimistic lot than economists like Roubini, explained the Times.
Some c-store retailers may also feel the worst is behind them, according to a new, exclusive study conducted by Convenience Store News. According to the survey, conducted in December 2008, 60 percent of c-store retailers reported declines in third-quarter sales compared with a year ago, but 70 percent expected fourth-quarter 2008 results to be the same or better than in 2007.