Cleveland Fed Predicts 1.1 Percent Yearly GDP Growth And 1.7 Percent Chance Of Recession

From The Federal Reserve Bank of Cleveland, "Yield Curve and Predicted GDP Growth" by Joseph G. Haubrich, Vice President and Economist and Timothy Bianco, Research Analyst, June 30, 2011:

Projecting forward using past values of the spread and GDP growth suggests that real GDP will grow at about a 1.1 percent rate over the next year, essentially the same as for May, and just a rounding convention up from the predictions for April and March. The strong influence of the recent recession is leading toward relatively low growth rates, with a steady beat of 1 percent predictions. Although the time horizons do not match exactly, the forecast comes in on the more pessimistic side of other predictions, though like them, it does show moderate growth for the year.***Using the yield curve to predict whether or not the economy will be in recession in the future, we estimate that the expected chance of the economy being in a recession next June is 1.7 percent, up just a bit from May’s 1.3 percent and April’s 0.9 percent. So although our approach is somewhat pessimistic as regards the level of growth over the next year, it is quite optimistic about the recovery continuing.