Nigel Gault of IHS Global Insight gives one of the more bearish outlooks that I have seen. And Obama won't save us, he says:
Happy New Year? Maybe in 2010 As we enter 2009, the U.S. and global economies are in steep decline, in what is the most severe synchronized global downturn of recent times. ... One year from now, we will probably be able to look forward to 2010 with solid hope for a resumption of global growth. But first we have to get through 2009, which will likely see the first decline in world real GDP in the postwar era. ... We expect U.S. real GDP to drop 5.6% in the fourth quarter and 5.4% in the first quarter of 2009. ... We see negative growth through mid-2009, and only anemic positive growth in the second half, so that would put the recession's length at somewhere between 18 and 24 months—the longest in the postwar era. In terms of depth, we anticipate a 3.4% peak-to-trough decline in real GDP, exceeded only by the short-but-sharp 1957–58 recession (down 3.7%). The calendar-year GDP outcome for 2009 is minus 2.5% growth, worse even than the 1.9% drop in 1982. ... The holiday shopping season is proving as bad as retailers had feared. Real consumption dropped 3.8% in the third quarter; we expect declines in the 2.5–3.0% range in the fourth and first quarters. The decline in the labor market is accelerating; the United States lost 533,000 jobs in November and we expect a loss of 550,000–600,000 in December. We see the unemployment rate at 9.1% by the end of 2009. Housing starts and prices continue to retreat, with no end in sight, and nonresidential construction is poised for a steep drop in 2009. Export growth had been propping up the U.S. economy, but with the rest of the world in recession, we now expect exports to contract 7.0% in 2009. ... The Obama administration-in-waiting is preparing a large fiscal-stimulus package. ... The message from the Obama camp is that the package will be valued somewhere between $675 billion and $775 billion over two years. But how quickly can the funds actually be spent? Infrastructure spending is a key part of the package, and it cannot be turned on and off like a faucet. We assume that the funds will take much longer than two years to spend out, and that the actual total stimulus injected over the first two years will be $500 billion. Combined with the Fed's vigorous easing, the package should help to stabilize the economy in the second half of 2009 and promote some recovery during 2010.