Are We In a Recession? If So, What Does It Mean?

Realtor® Magazine Online - Interactive Article - Daily Real Estate News April 29, 2008

Two-thirds of the 52 economists surveyed last week by USA Today say the U.S. is in recession. Another 13 percent believe that the economy is headed that way sometime this year.The good news is that nearly all believe the recession will be short and shallow and inflation will decline.

Unemployment, one of the hallmarks of a recession, will probably rise to about 6 percent, says David Berson, chief economist for the PMI Group. "That's pretty low for a recession," he saysBut Berson continues to worry about real estate. "Given the drop in home prices, there's a big risk that foreclosures will go up more than expected," Berson says.

Some economists, however, are more optimistic and do not think the economy has, or will necessarily, fall into a recession. "A recession, by definition, is a broad-based decline in GDP that lasts more than a few months," says Ken Mayland of ClearView Economics. So even if there were a decline in the first quarter, Mayland says, that doesn't mean there will necessarily be a decline in the second quarter.

Source: USA Today, John Waggoner and Barbara Hansen (4/29/08)