Now that it's officially been deemed a recession by the experts, just how bad will it be?
University of Central Florida economist Sean Snaith, in a quarterly forecast released Tuesday, offered this sobering viewpoint: The "deepest and longest recession'' since at least the 1980s will drag on through most of next year, with full recovery not on the horizon for two years.
"Unfortunately, the end of the recession will not represent the end of this episode," he wrote. "The ramifications of the credit meltdown will last beyond 2009 and right through 2010. … It will be 2011 when the credit channels are completely unblocked and the U.S. economy beats powerfully once again."
Economists have all but thrown in the towel for the short term. In a recent survey of forecasters, 74.8 percent said they believed that the nation's economic output will fall in the first quarter of 2009. That's the highest negative reading in the 40-year history of the Survey of Professional Forecasters.
Snippets of Snaith's forecast:
• Expect four consecutive quarters of negative economic growth before the economy slowly emerges from recession during the third quarter of 2009.
• Unemployment, which lags the business cycle, will peak at 8.4 percent nationally in 2010 before slowly receding to 8 percent by the end of 2011. That translates to shedding 3-million payroll jobs.
• The U.S. government's budget deficit will smash previous records, exploding to $1.3-trillion in 2009.
• Even by 2011, housing starts will still be lower than 2007 levels.
• After the "false hopes of Black Friday quickly fade," expect to see more bankruptcies and layoffs among retailers.
• Oil prices will continue to fall during the recession, though less dramatically than seen lately.
• If an economic stimulus package in the $500-billion range is approved early next year, the bulk of it will go to state and local governments for building and repairing roads and bridges. It will shorten the recession and lessen the severity of the final months of the economy's retraction.
Jeff Harrington can be reached at firstname.lastname@example.org or (727) 893-8242.