Economists that participated in a WSJ.com survey felt that there was on average a 36% chance that the US will fall into recession in the next 12 months. There were 52 economists that participated in the survey, and it was taken the days following the disappointing jobs report on September 7th. Three-fourths of the economists thought there was a greater than 30% chance of recession, and the 36% average was up from 28% a month ago. The main sources of risks were the credit crisis and the housing slump. About 60% of the forecasters thought the housing slump was half over, while the rest still thought it was in its early stages. The economists that felt more positive about the US economy believed that strong manufacturing expansion and a solid global economy creating more US export growth would support the US. About 85% of the forecasters felt the existing conditions necessitated a rate cut. Wells Fargo economist Scott Anderson said, "The drop in trend employment growth is stark and deserves a response from the Fed if only for insurance reasons." Economists forecast a couple rate cuts in the next year. and predict the fed funds rate will drop to 4.5% by mid 2008. Finally, not one economist predicted that oil would finish this year above $80/barrel. The average price estimated was $68.63/barel.
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