by Charles Lemos, Thu Dec 11, 2008 at 08:05:33 PM EST
In its 4Q08 report released today, the UCLA Anderson Forecast for 2009 is rather grim reading. Widely respected, the UCLA Anderson Forecast predicts that the current recession affecting the US economy will last at least four quarters of negative growth followed by very low growth rates of well under 3% with rising unemployment rates that last through 2010. The UCLA Anderson Forecast unit expects real GDP to shrink by 4.1% in this the final quarter of 2008 and by another 3.4% and 0.8% in the first and second quarters of next year, respectively, as consumer and business spending weaken and as the foreign trade that had propped up growth much of this year sags. Indeed, the trade deficit widened today as exports fell sharply. The unemployment rate, according to the report, is forecast to rise from October 2008's 6.5% to 8.5% by 4Q09/1Q10. Put into meaningful numbers, that's a loss of two million jobs over the next 12 months.
"Because Europe and Japan are already in recession and China and India are suffering from a significant slowdown in growth, the export boom of the past few years will wane," the report said. "Make no mistake the global economy is in its first synchronized recession since the early 1990s."