US to see four quarters of nasty recession: Report

WASHINGTON: The ongoing recession inflicting the world's largest economy will engulf four quarters into a negative growth rate and might lead to surging unemployment rates through 2010, a new report said on Thursday.

In its fourth quarterly report of 2008, the UCLA Anderson Forecast, a keenly watched economic outlook, today said that the positive growth rates after four quarters of negative growth would also be "very tepid."

"The news from the economy is bad... The recession we had previously hoped to avoid is now with us in full gale force," UCLA Anderson Forecast Senior Economist David Shulman said.

The UCLA Anderson Forecast now expects that real Growth Domestic Product (GDP) will decline by 4.1 per cent in the current quarter, followed by respective declines of 3.4 per cent and 0.8 per cent in the first two quarters of 2009.

In addition, the unemployment rate is forecast to rise from 6.5 per cent recorded in October 2008 to 8.5 per cent by late 2009 or early 2010.

Besides the rising unemployment rate, there would be a total of two million job losses over the next 12 months.



The report noted that the blame for this "nasty recession" goes to the financial crisis of 2007-2008 and the economic circumstances underlying current conditions differed significantly from the past recessions.

It further noted that the "global economy is in its first synchronized recession since the early 1990s," as Europe and Japan are also in recession while China and India are suffering growth slowdowns, which, in turn, negatively impact US exports.

UCLA Anderson Forecast, which is a unit of leading business school UCLA Anderson School of Management, claims to be that it has been credited as the first major US economic forecasting group to declare the recession of 2001.