WASHINGTON (Reuters) - The slowing U.S. economy is unlikely to sink into an election-year recession and an economic rebound could begin as early as next year as housing and financial market turmoil fades, the Congressional Budget Office forecast on Wednesday.

In the meantime, the U.S. budget deficit will grow to $219 billion this year, up from the $163 billion registered last year, according to a CBO report submitted to Congress.

But that forecast by Congress' nonpartisan budget analyst does not include the cost of an economic stimulus measure that is quickly moving through Congress and could cost around $150 billion or more. The deficit projection for fiscal 2008, which ends September 30, also does not include more money Congress is likely to approve this year for the war in Iraq.

While CBO noted an elevated risk of recession, its outlook was weighted more toward the United States working through its current economic problems and escaping a full-blown recession.

"Although recent data suggest that the probability of a recession in 2008 has increased, CBO does not expect the slowdown in economic growth to be large enough to register as a recession," CBO said.

"CBO expects the economy to rebound after 2008, as the negative effects of the turmoil in the housing and financial markets fade," the semi-annual budget and economic report said.

Surveys of U.S. employers, CBO said, so far do not suggest they plan large future reductions in hiring. However, CBO noted that "such labor-market indicators could deteriorate suddenly."

Originally posted by DimensionalDetective


I'm honestly at a loss for words anymore. These people are so out of touch with the average working american trying to support a family and make ends meet, that it's disturbing.

They all appear to live in an alternate reality, where everything is "happy time".

WE ARE IN A RECESSION YOU BUFOONS.

www.reuters.com
(visit the link for the full news article)