According to the Federal Reserve Bank of Philadelphia survey released on Monday, the U.S. economy is in a recession and it expected to last 14 months.
Fifty-one panelists surveyed unanimously believe that the United States is either in or about to enter a recession. The panel said the recession began in April 2008. "The forecasters predict that the U.S. economy is headed for a couple of rough quarters," read the Philly survey.
The Philly Fed survey expects the real GDP to decline at an annual rate of 2.9% in the fourth quarter and 1.1% in the first quarter of 2009. The survey expects growth to resume in the second quarter in 2009, coming in at 0.8%, 0.9% in the third quarter and 2.3% in the fourth quarter.
Thirty-five per cent of the panelists polled said that their forecast factors in a second stimulus package estimated at $211 billion. The forecasters expect $69 billion to go towards government consumption, while $54 billion will be used for transfer payments, and $71 billion in tax cuts.
Forecast predicts the stimulus package will add 0.6% to the average year-over-year real GDP in 2009 and 0.4% in 2010.
By Steve Stecyk and edited by Nancy Girgis
©CEP News Ltd. 2008