Recession in 2008?

From the Wall Street Journal:

Odds of Recession Seen Rising
Economists in Survey
Predict Slower Growth,
Unemployment Increase
By PHIL IZZO
January 11, 2008

Economists surveyed by The Wall Street Journal see increasing odds of a recession this year along with mounting inflationary pressures, an uncomfortable mix that could play a role in shaping the 2008 presidential campaign and complicate life for the Federal Reserve.

In the latest monthly survey, economists put the chance of recession at 42%, up from 38% in December and 23% just six months ago. On average, the 54 forecasters who participated see the economy expanding at less than a 2% annual rate in the first and second quarters. Last month’s survey estimated 2007 growth at 2.5%.

“The U.S. economy in 2008 will be like a cat on a hot tin roof that has already used up eight of its nine lives,” said Stuart G. Hoffman of PNC Financial Services Group Inc. Amid rising unemployment, higher oil prices and troubles in the credit and housing markets, “you worry about the cumulative effect that it all has on psychology,” he said.
…
Three economists forecast a recession in 2008. Setting off the alarm bells was last month’s jump in the nation’s unemployment rate to 5%. “Historically, this has invariably been associated with recession, typically starting immediately and almost always within three months,” Goldman Sachs Group Inc. said in a research note.

The economists expect the unemployment rate to be 5.1% by June and 5.2% by December; both predictions exceeded earlier forecasts. They also expect the economy to add just 74,000 jobs a month during the next year, the fewest since the question was added to the survey in 2004.