WASHINGTON – The White House said Thursday the economy will remain gloomy through at least the end of the year, inching closer toward a recognition the United States is in a recession.
"We expect our GDP (gross domestic product) number next week not to be a good one and the next quarter to be tough as well," White House press secretary Dana Perino said.
Many analysts predict the economy could contract over the final three months of this year and in the first 90 days of 2009. That would meet the classic definition of a recession — two consecutive quarters of economic contraction. Some financial analysts say the sagging economy already is in recession.
The White House has been loath to use the word "recession" — both because the technical definition has not been met and because it carries such negative fallout.
Perino said she's not forecasting a recession, but that given the time that will be needed for the economy to turn around, it's realistic to assume that the next two reports on the nation's economic health will not be good.
"I don't forecast from here, but just looking at reality and how long it's going to take the people to return this country to job growth, it could be awhile," she told reporters. "I don't forecast recessions. I don't make those determinations. ... But I can tell you that the president knows that we're in for a rough ride."
The White House and Congress hope that a $700 billion rescue plan will inject cash and confidence into the lending industry and recharge the economy. Democratic lawmakers also are considering a multibillion-dollar, post-election stimulus package.
Perino spoke just after former Federal Reserve Chairman Alan Greenspan told the House Oversight Committee that the current crisis was much broader than he had anticipated.
"Given the financial damage to date, I cannot see how we can avoid a significant rise in layoffs and unemployment," Greenspan said. "Fearful American households are attempting to adjust, as best they can, to a rapid contraction in credit availability, threats to retirement funds and increased job insecurity."