Economist sees 95 percent chance of US recession

The chances of the U.S. economy falling into a recession are 95 percent, an economist said at a real estate conference Thursday.

(Business week) -- Kenneth Rosen, a professor of real estate and urban economics at the University of California-Berkeley, put the chances of a deep recession at 45 percent and a mild one at 50 percent. He only sees a 5 percent chance that the economy will quickly recover.

"We're on very fragile ground. All we need is one more bad thing to happen, another event to take place," to send the economy into a deep recession, Rosen said during a panel at the National Association of Real Estate Investment Trust's REIT Week investor forum in New York.

In his deep recession scenario, the economy would contract by 1.8 percent and the unemployment rate would rise to 7 percent, he said. The Standard & Poor's 500 index would hover around 1,050, and the Nasdaq composite index at 1,700.

By contrast, the economy would shrink by 0.1 percent in a mild recession with unemployment edging up to 5.8 percent. The S&P 500 would level off at 1,400 and the Nasdaq at 2,300.

The unemployment rate now stands at 5 percent and the economy grew at a weak 0.9 percent during the January-to-March period. The S&P 500 closed Thursday at 1,404.05, and the Nasdaq ended at 2,549.94.