Economists See Recession Through 1Q 2009 Amid Retail Sales Plunge

November 17, 2008 12:17 p.m. EST

Washington, D.C. (AHN) - A majority of a panel of economists responding to a survey think the nation's recession will last beyond the first quarter of next year, that news comes as retail sales plunged by a record 2.8 percent from September to October, beating the post 9/11 drop.

The National Association for Business Economics surveyed a panel of 50 experts and found it had changed its forecast for economic growth for the year. In October the surveyed group had forecast 1.2 percent growth for the year and it now says it expects growth of only 0.2 percent.

Economists changed their prediction in light of the growing numbers of job losses and the decline in shopping by an American public in which more people lack an income and the poor business climate makes finding a job nearly impossible.

Ninety-six percent of the surveyed economists say they think the economy is in recession.

About 48 percent of the surveyed business economists think that housing prices will bottom out sometime in the middle of next year and an equilibrium of supply and demand will be achieved.

This optimism comes despite the rising unemployment figures, the fact that 25 percent of the nation's adults earn $10 per hour, or less, and the fact that there are currently 24 million more housing units in the U.S. than there are households.

Consumer sales accounts for two-thirds of the nation's economy.

In October, consumers pulled back from spending on everything but the basics, the National Retail Federation said.