WASHINGTON — First the good news: The worst of the painful housing slump and the credit crunch might come to an end this year.
Now the bad: The economy will weaken further, and unemployment will rise.
That is the latest outlook from forecasters in a survey to be released today by the National Association for Business Economics.
It will take time for any light to poke through the economic clouds, though.
Fifty-six percent of economists think the country is on the brink of a recession or in one already, dragged down by the problems in the housing, credit and financial markets. That is up from 45 percent in a survey in February. If there is a recession, it probably will be short and shallow, economists said.
Forecasters downgraded their projections for economic growth. They now predict the economy, which grew by 2.2 percent last year, will slow to 1.4 percent growth this year. That is lower than the 1.8 percent growth projected in February. If the new figure proves correct, it would mark the weakest growth since the last recession in 2001.
Next year, the economy should grow by 2.3 percent, less than previously forecast and a pace still considered subpar.
“Although housing and credit markets will gradually loosen their grip, U.S economic growth is expected to only slowly return to health,” said Ellen Hughes-Cromwick, president of NABE and chief economist at Ford Motor Co.
Given the outlook for sluggish overall economic activity, companies are likely to remain cautious in their spending and hiring. The unemployment rate, which averaged 4.6 percent last year, will move higher. Forecasters predict the jobless rate will hit 5.3 percent this year and 5.6 percent next year.
Forecasters are hopeful that the housing slump — in terms of home sales — will hit bottom this year. However, economists were divided over whether the low point would be reached in the second, third or fourth quarter of this year. Home prices are still expected to drop this year and next.
The survey of 52 forecasters was conducted April 17 through May 1.
