UCLA news report:
In its third quarterly report of 2011, the UCLA Anderson Forecast says the outlook for the nation's economy is "far worse" than it was just three months ago.
Considering the weak, revised data for the first half of the year, the forecast calls for average gross domestic product growth of just 0.9 percent on average for the five quarters — this year's four and the first quarter of 2012.
However, Forecast economists remain steadfast in their assertion that the U.S. is not currently in a recession, nor is there a recession in the forecast through 2013. ...
"Simply put, the three sectors that would normally put the economy into recession are already depressed — housing, consumer durables and inventories," Shulman says. "Even if housing starts drop to new lows, this sector of the economy has shriveled so much that it would only have a modest impact on economic activity ... It is one thing for housing starts to decline from an annual pace of 2 million units to 1 million and quite another for starts to decline from 600,000 units to 300,000 units.
"If we are to have a new recession, it would have to come from a collapse in exports, a generalized decline in consumer spending with a resultant decline in business investment. All plausible, but we are not forecasting that eventuality." ...
On the employment front, Shulman writes, "Recession or not, the employment situation remains horrible. Job growth has stalled, and we forecast that the unemployment rate will soon rise to 9.5 percent. Thus, even by the end of 2013, we will not be back to the unemployment levels of late 2007."
