Economists Say Recession Unlikely (Jeannine Aversa)

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Former U.S. Federal Reserve Bank Chairman Alan Greenspan warned this week that the United States could slip into recession this year.

By Jeannine Aversa -- Associated Press

Feb. 27, 2007 -- WASHINGTON (AP) -- Alan Greenspan and the Wall Street nosedive aside, economists think the probability of a U.S. recession this year is fairly low and the likelihood of one in China is even slimmer.

Greenspan, the former chairman of the Federal Reserve, warned this week that the world's largest economy -- the United States -- could slip into recession this year. That would be bad news for the global economy, too.

However, many economists put the probability of a recession at about one in five.

The biggest risk to the five-year-old U.S. economic expansion is that the housing slump might take an unexpected turn for the worse, analysts say. In one dire scenario, not only would consumers and businesses clamp down on spending and investing, but troubles could spread to lenders dealing in risky mortgages, triggering a financial crisis.

The latest U.S. economic barometers released Tuesday were mostly good, but they failed to ease investors' anxiety. The Dow Jones Industrials tumbled 416.02 points to close at 12,216.24. At one point during the day, the Dow slid as much as 546 points, its worst decline in more than five years.