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Economists see U.S. recession
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November 14, 2001: 12:33 p.m. ET
Two research groups show recession is near, but stimulus could make it short.
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NEW YORK (CNN/Money) - The United States is teetering on the edge of a recession in the wake of the Sept. 11 terror attacks, according to recent reports by two separate research groups, but aggressive action by the Federal Reserve will likely make it short and relatively painless.
Ninety percent of the 33 members of the National Association for Business Economics, surveyed in November, said the terror attacks would trigger a recession, commonly defined as two straight quarters of shrinking gross domestic product (GDP).
GDP shrank at a 0.4-percent annual rate in the third quarter, and most NABE members expect it to shrink at a 2.0-percent rate in the fourth quarter. But 82 percent of the economists surveyed expected a return to positive GDP growth in the first half of 2002.
"The September 11 attacks pushed the U.S. economy into a recession that will be mild both in depth and duration," said Harvey Rosenblum, NABE president and director of research at the Dallas Federal Reserve Bank.
The panelists thought the Fed's 10 interest-rate cuts this year, three since the attacks, would spur consumer spending, which fuels two-thirds of GDP growth. A multibillion-dollar economic stimulus package of tax cuts and spending from Congress, which may be passed soon, will also ease the pain, according to the survey.
"The rapid easing of monetary and fiscal policy this time around should enable the economy to return to positive growth more quickly than usual and with lower interest rates and inflation than during the 1990s expansion," Rosenblum said.
Click here for CNNmoney.com's economic calendar
Separately, the National Bureau of Economic Research, which tries to pinpoint the date of recessions and expansions in the economy by tracking four specific data items, rather than tracking GDP, said Friday it had not yet determined the economy was in recession - but it was getting closer.
The NBER compares data on employment, personal income, industrial production, and wholesale and retail trade to past economic cycles to determine the beginning and ending of peaks and valleys in economic growth. It's been credited in the past with being among the first groups to recognize recessions.
Its business-cycle dating committee has not yet met, the group said, because the data it follows have not yet matched recessionary levels. But, of the four data items, only personal income is rising. The others are falling, meaning a recession could be near. 
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