The U.S. economy is in recession and will contract at a faster pace in the fourth quarter, extending the decline into early 2009 as high unemployment crimps consumer spending, a survey showed, Reuters reported.
The National Association of Business Economists' poll of 50 professional forecasters released on Monday found that real gross domestic product was expected to fall 2.6 percent in the fourth quarter and slump 1.3 percent in the first three months of 2009.
Preliminary government estimates showed GDP contracted 0.3 percent in the third quarter. The results of the survey, which was conducted between October 28 and November 7 indicated growing pessimism among forecasters.
"Business economists became decidedly more negative on the economic outlook for the next several quarters as a result of the intensification of credit market stresses and evidence of spillover to the real economy," said NABE President Chris Varvares.
"Credit conditions continue to be tenuous. Despite the hefty liquidity injections by the Fed and the Treasury, the majority of NABE panelists believe that tight credit conditions will continue."
A month ago, forecasters expected the economy to expand 0.1 percent in the fourth quarter, with the growth pace accelerating
to 1.3 percent in the first quarter of 2009.
Troubles in the U.S. housing sector, emanating from the extension of loans to homeowners with poor credit history, have engulfed the broader economy, resulting in rising job losses and tight access to credit.