Recession probable, says Richmond Fed economist

By Gregory J. Gilligan
Media General News Service
Published: September 16, 2008

Most signs point to the U.S. economy heading toward a recession - if it isn’t in one already, a research economist with the Federal Reserve Bank of Richmond said.

“A recession looks like a higher probability than it did a few months ago,“ Raymond E. Owens III, the Richmond Fed’s vice president and research economist, said at a breakfast speech.

The economic headwinds these days are turbulent with rising unemployment, a prolonged housing recession, a severe credit crunch and a troubled financial system.

“Those headwinds have picked up of late and pushed that probability [of a recession] higher,“ Owens said.

Owens gave members of the Greater Richmond Association for Commercial Real Estate an update on the economy during his talk at the Country Club of Virginia.

“The economy is in a bit of a soft spot,“ he said.

Key factors including declines in personal income, jobs and industrial production as well as the credit crunch and housing crisis point to an economy teetering on a recession, he said.