Hard Times Slowly Fading; No Recession in 2008

On Monday, the Association for Financial Professionals announced that a comprehensive survey of 651 financial professionals in the United States finds they anticipate that the U.S. economy will weaken over the next 12 months; however, it won't slip into recession in 2008. Over 33% of the survey respondents also expect their firms to expand their U.S. workforce in 2008.

In the wake of a 2007 that experienced a falling U.S. dollar, uncertain energy prices, a disintegrating housing market, and the sub-prime mortgage crisis, 49% of financial professionals expect business conditions to weaken during 2008, while 14% anticipate business conditions to strengthen next year. Their biggest concerns are the declining U.S. dollar, increasing costs of energy, and the ramifications of the housing market debacle.

The volatility in credit markets resulting in part from disruptions in the sub-prime mortgage industry has had some impact on corporate credit, but at the same time access to credit has remained stable over the past six months.

"The financial professionals we surveyed have a deep, comprehensive understanding of the market forces and business dynamics affecting the U.S. economy. They are managing operations affected by credit, employment, and dollar valuations day in and day out...Their views are excellent indicators of future business conditions," said Jim Kaitz, President and CEO of AFP.

However, the Dow Jones Industrial Average was down nearly 100 points in morning trading Monday as investors took notice of a recent statement by Alan Greenspan in which he warned of a possible U.S. economic recession in 2008 and said that the federal government needed to do more to prop up sub-prime borrowers.

The Dow closed down 178 points on Friday in the wake of investors' worries over higher than expected inflation.