WASHINGTON — The United States is already in a recession that will last "well into 2009," the Credit Union Economics Group is forecasting.
The one bright spot is that there won't be inflationary pressure, the group says.
"Our consensus paints a clear picture of the economy finishing the year on a very weak note, with that weakness continuing through 2009," said CUNA Mutual Group Chief Economist Dave Colby, a member of the group. "CUEG does not anticipate a strong deposit surge at credit unions during this economic cycle like we saw in 2001."
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The average forecast of the group's members for the rest of 2008 include: Gross Domestic Product will be .83% higher in the fourth quarter than in the same period last year; the unemployment rate will end the year with an annual average of 5.9%, the average 30-year fixed mortgage will be 6.04%. The federal funds rate (the rate at which banks lend each other money) at the end of 2008 will be 1.475%, they predict.
Its members' average forecasts for 2009 include: GDP growth of .85%; an average unemployment rate of 6.63% and the 30-year fixed rate mortgage will be 6.18%. They are projecting the federal funds rate at the end of 2009 will be 1.7%
NAFCU Chief Economist Tun Wai said while the group had revised many of its projections downward, it hopes that any additional actions by the government will speed the effort towards moving the economy upward.
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