Subject: [big campaign] New Video: McBush on the Economy - The Same Old Thing
From: "Brad Woodhouse" <[email-masked]>
Date: Fri, 14 Mar 2008 10:55:45 -0400
List-Id: <bigcampaign.googlegroups.com>

www.americansunitedforchange.org

FOR IMMEDIATE RELEASE                          CONTACT: Jeremy Funk,
202-470-5878

DATE: March 14, 2008

While McCain and Bush Stick Their Heads in the Sand on the Economy, 70
Percent of Economists Surveyed by the Wall Street Journal Say we are
Already in a Recession

Click Here to See the New Video: McBush on the Economy - The Same Old
Thing
<http://www.americansunitedforchange.org/index.php?bushlegacy/blog/new_v
ideo_mcbush_on_the_economy_the_same_old_thing/> 

Washington - 63,000 jobs lost in February - the most in five years.
Record gas and oil prices.  Health care and energy costs soaring.
Trillions spent in Iraq.  And, on the same day President Bush speaks on
the economy in New York, 70 percent of economists surveyed by the Wall
Street Journal say that the economy is already in recession.  All the
while, President Bush and his newest best buddy have repeatedly denied
the obvious - glossing over wrenching economic times for millions of
Americans as simply a "rough patch" and denying the existence of an
obvious economic downturn.  Click Here to See the New Video: McBush on
the Economy - The Same Old Thing.
<http://www.americansunitedforchange.org/index.php?bushlegacy/blog/new_v
ideo_mcbush_on_the_economy_the_same_old_thing/>  

 
<http://www.americansunitedforchange.org/index.php?bushlegacy/blog/new_v
ideo_mcbush_on_the_economy_the_same_old_thing/> 

 

To Learn More About the Bush Legacy Project Click Here
<http://www.presidentbushlegacy.com/> 

-30-

  <http://online.wsj.com/home> 

 

March 13, 2008 

 

 

ECONOMIC FORECASTING SURVEY 

 

Most Economists in Survey Say Recession Is Here

Poll Shows Sharp Drop 
In First-Half Forecasts; 
Retail Sales Decline

By PHIL IZZO and SUDEEP REDDY
March 13, 2008; Page A14

Economists in the latest Wall Street Journal forecasting survey are
increasingly certain the U.S. has slid into recession, a view reinforced
by new data showing a sharp drop in retail sales last month.

"The evidence is now beyond a reasonable doubt," said Scott Anderson of
Wells Fargo & Co.

CHARTS AND FULL RESULTS

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See and download forecasts
<javascript:OpenG('http://online.wsj.com/public/resources/documents/info
-flash08.html?project=EFORECAST07')> 2 for growth, inflation, housing
and more. Plus, views on the housing crisis, predictions for
presidential candidates and more. Survey conducted March 7-11.

* Econ Blog: Housing Market Has Further to Fall
<http://blogs.wsj.com/economics/2008/03/13/housing-market-has-further-to
-fall/> 3

* Washington Wire: Rating Candidates on Nafta, Budget
<http://blogs.wsj.com/washwire/2008/03/13/economists-rate-the-candidates
-on-nafta-balanced-budget/> 4

Thirty-six of 51 respondents, or more than 70%, said in a survey
conducted March 7-11 that the economy is in recession.

The Commerce Department said yesterday that retail sales fell 0.6% in
February; sales excluding the volatile auto and auto-parts categories
fell 0.2%. The declines reflect a sharp slowdown in consumer spending,
which accounts for more than 70% of U.S. economic activity, as Americans
grapple with high gasoline and food costs and declines in home values
and other asset prices.

The survey marked a precipitous shift toward pessimism from the previous
survey, conducted five weeks earlier. The economists now expect nonfarm
payrolls to grow by an average of just 9,000 jobs a month for the next
12 months -- down from a previously expected 48,500. Twenty economists
expect payrolls to shrink outright. On average, the economists predicted
the unemployment rate will be 5.5% in December, up from the current
4.8%.

Fueling the gloom: last Friday's employment report, which showed a loss
of 63,000 jobs in February, the second consecutive monthly decline.
Twenty-nine of 55 respondents said they expect the economy to contract
in the current quarter, and 25 expect it to do so in the second.

ABOUT THE SURVEY

The Wall Street Journal surveys a group of 55 economists throughout the
year. Broad surveys on more than 10 major economic indicators are
conducted every month. Once a year, economists are ranked on how well
their forecasts have fared. For prior installments of the surveys, see: 
WSJ.com/Economists <http://wsj.com/economists> 5.

The economists, on average, forecast meager economic growth -- just 0.1%
at an annual rate in the current quarter, and 0.4% in the second.

Although the classic definition of recession is two consecutive quarters
of declines in the gross domestic product, Stephen Stanley of RBS
Greenwich Capital pointed out that the National Bureau of Economic
Research, the nonpartisan organization that is the official arbiter of
recessions, doesn't always strictly follow that definition. "If you go
back to the 2001 recession, there was only one negative GDP quarter, and
there might not even be one negative quarter in this recession," he
said.

Almost half the economists surveyed said a recession this year could be
worse than the 2001 and 1990-91 downturns. Amid the rising concerns,
respondents expect more action from policy makers. Some 63% said the use
of public money to deal with the housing crisis is now likely or
certain, while on average they expect the Federal Reserve to lower the
target for its benchmark federal-funds rate to 2% by June from the
current 3%.

  
A WSJ survey of economists reveals that 71% of those surveyed believe
Americans are currently in a recession. WSJ's Phil Izzo discusses the
findings with Kelsey Hubbard.

Fed policy makers meet on Tuesday, and futures markets are fully pricing
in at least a 0.5-percentage-point cut in the rate and indicating a 90%
probability of a 0.75-point cut. Officials had, before this week, been
unconvinced that a 0.75-point cut was needed, given signs that inflation
psychology is worsening.

But those views may have been affected by continued upheaval in credit
markets, as well as weak retail sales and employment data. Market
participants say this would be a risky time to cut rates less than
investors expect. The Fed will have to weigh the urgency of addressing
the credit crunch against the risk of appearing unconcerned about
inflation.

The consumer-price index for February will be released today, and
economists surveyed by Dow Jones Newswires expect a 4.5% increase from a
year earlier.

Most forecasters expect an economic recovery to begin in the second half
of this year, as the government's economic-stimulus package and the
interest-rate cuts begin to spur the economy. By the end of the year,
they expect inflation to be running at an uncomfortably high 2.7%,
raising the question of when the Fed might start raising rates.

Some 84% of economists in the survey said the Fed was too slow to raise
interest rates in 2003 and will want to avoid that mistake. Still, "it's
going to take some time even under the best of circumstances before the
Fed can be comfortable that the economic situation has stabilized," said
Bruce Kasman of J.P. Morgan Chase.

The survey suggests the darkening outlook may have made Fed Chairman Ben
Bernanke's job less secure, especially with a new president coming on
the job in less than a year. The economists gave the Fed chairman just a
59% chance of being reappointed in 2010. "If a Democrat is elected, he
won't be reappointed, and [presumptive Republican presidential nominee
John] McCain may opt for another, too," said David Resler of Nomura
Securities.

"The problems occurred on his watch," added Ram Bhagavatula of
Combinatorics Capital.

February's decline in retail sales, which followed a 0.4% increase in
January, raises the likelihood that the overall economy will contract in
the first quarter.

 Many retailers are bracing for tougher times. Even if the current
downturn doesn't yet meet the technical definition of a recession, "it
certainly feels like a recession based on consumer sentiment and
confidence reaching record lows," Men's Wearhouse Inc. chief executive
George Zimmer said earlier this week.

"The average consumer is feeling economic pressure as they experience
rising prices in fuel and basic staples, the effects of declining home
prices, which for most individuals represent their single largest asset,
not to mention the possibility of foreclosure on their home," Mr. Zimmer
said.

Categories tied to housing took some of the biggest sales hits, but the
declines were widespread: Sales at department stores dipped 0.2%, while
restaurant sales fell 0.4%.

Consumers are pulling back in part because of a weakening job market.
Initial claims for unemployment benefits last week were unchanged at
353,000 from the week before, the Labor Department said yesterday. That
suggested employers are slowing their hiring rather than making big
layoffs. Continuing unemployment claims rose 7,000 to 2.84 million for
their fourth straight gain.

Meanwhile, business inventories increased 0.8% in January, suggesting
production slowdowns ahead as the economy slows. Import prices rose 0.2%
in February from a month earlier and were up 13.6% from the year before,
reflecting the weak dollar and rising commodity prices globally.

--Greg Ip contributed to this article.

Write to Phil Izzo at [email-masked] and Sudeep Reddy at 
[email-masked]

 

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