The U.S. economy will escape a 2008 recession, a UCLA study forecast Wednesday.

"Be calm, my friends. Be calm," wrote Edward Leamer, forecast director for the Anderson School of Management at the University of California, Los Angeles.

Despite rising oil prices, sinking housing prices and a turbulent stock market, the nation's economy will be saved by some of its apparent weak spots, the report said.

The silver linings include a weak dollar, which will help U.S. exports; a drop in consumer spending, which will be felt more strongly by other countries than at home; and the loss of 3 million manufacturing jobs early this decade, which means there is little room to cut more positions, the report said.

The report added that most of the damage to the economy from the subprime mortgage financial crisis will be over by the end of next year, the Los Angeles Times reported.

UCLA economists also predicted stock prices would rise 10 percent to 12 percent next year amid calming credit markets and modest economic growth. 
 // Copyright 2007 by United Press International


Publication date: 06 December 2007   

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