As a new year begins recession fears are looming, but Wall Street gurus remain optimistic about 2008. Despite the subprime credit crisis that contributed to a volatile second half of 2007, the U.S. Economy will beat the odds of a recession, re-accelerate over the course of 2008 and help to stabilize most financial markets, according to Mesirow Financial’s fourth annual Investment Outlook. A separate UCLA Anderson forecast suggests that despite rising oil prices, sinking housing prices and a turbulent stock market, the nation will escape a recession in 2008.
Executive search firm, A.E. Feldman, says that hiring at senior levels remains strong. International and domestic tax professionals, asset and wealth management professionals, corporate securities and litigation attorneys, and business valuation specialists are among those in high demand. Qualified professionals are also needed at hedge funds, and infrastructure finance jobs are opening up for candidates with backgrounds in private equity and experience with credit and complex financial models.
The economy has already taken some of its hardest hits. Despite the turmoil over falling home prices, rising oil prices and a widespread credit crunch, the UCLA Anderson Forecast contends that a national recession is not on the economic horizon. If declines in housing were going to trigger a recession, they would have done so already, according to their report. UCLA Forecast Director, Edward Leamer. Leamer says that recessions have traditionally trailed a housing peak by no more than a year. Currently, the business cycle is trailing the housing cycle by seven quarters without a recession.
Financial markets will stabilize in 2008, as the U.S. economy rebounds, according to Mesirow Financial’s fourth annual Investment Outlook. ”The turmoil we face today may leave us a bit battered and disoriented, but not defeated in 2008. After decelerating during the second half of 2007, Real GDP will rebound over the course of the year. Consumer spending is expected to slow but not collapse. Profit growth is forecast to reaccelerate slightly after a lull in 2007, with gains likely in the 8% range. The trade deficit is expected to continue to narrow as exports remain particularly strong,” says Diane Swonk, Mesirow Financial’s Chief Economist.