Capitol Hill (AP) Federal Reserve Chairman Ben Bernanke is warning lawmakers that a recession “is possible,” adding that the economy may shrink over the first half of this year.
Bernanke's testimony to the joint economic committee has been a much more pessimistic assessment of the economy's immediate prospects in terms of dealing with housing, credit and financial crises.
He told lawmakers today that it appeared likely that gross domestic product will not grow much over the first half of 2008 and could even contract slightly.
GDP measures the value of all goods and services produced within the United States and is the best barometer of the country's economic health. Under one rule, six straight months of declining GDP would constitute a recession.
However, Bernanke says that he expects more economic growth in the second half of this year and into 2009.