Bernake Forecasts sketchy close to 2008 economy??

A weakening economy is largely psychological. The solution to a lagging US dollar is to not necessarily to spend more, but to maintain a normal spending pattern if you are able. Theoretically, this should facilitate a normal growth pattern. I personally think (even though I know it will be made up up for in other ways) that the coming economic stimulus plan may help get consumers in the right frame of mind for more spending and a better outlook for the remainder of 2008. Hopefully. Ben Bernanke forecasts otherwise.....

Recession May Be Here, Fed Chairman Says

Source: Knight Ridder Washington Bureau Publication date: 2008-04-02 WASHINGTON _

A worsening short-term outlook for the U.S. economy suggests that growth has stalled and may even contract in the first half of this year, Federal Reserve Chairman Ben Bernanke told Congress on Wednesday, sending a strong signal that a recession may have arrived. "It now appears likely that real gross domestic product will not grow much, if at all, over the first half of 2008 and could even contract slightly," Bernanke told the Joint Economic Committee, adding that "uncertainty attending this forecast is quite high and the risks remain to the downside."





Translation: The U.S. economy may be in recession (italics mine). That's usually defined as two consecutive quarters of negative growth, although recessions are called after the fact by the National Bureau of Economic Research, which measures recession as a protracted slowdown in a wide range of business activities. Bernanke's testimony was the strongest evidence yet that the economy may have slipped into what a majority of mainstream economists now expect to be a mild recession. The Fed chairman expects economic activity to strengthen over the second half of the year as steep interest-rate cuts and a fiscal stimulus package passed by Congress with tax rebates to consumers start to be felt. By 2009, growth should return to or above a "sustainable pace," buttressed by a stabilization of housing activity, Bernanke said. Not all housing economists agree. The chief economist of government-sponsored enterprise Freddie Mac. Frank Nothaft, said last week that he didn't expect a recovery in housing sales and prices until 2010.

___ (c) 2008, McClatchy-Tribune Information Services.