PHIL IZZO and SUDEEP REDDY
Wall Street Journal
March 14, 2008
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.
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%.
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