The U.S. economy may face back-to- back recessions this year and next, said Douglas Kass, a general partner at Seabreeze Partners Management Inc., an investment firm in Palm Beach, Fla.
“While there are currently signs of economic stabilization, the slope of the recovery is going to be shallow by most historical standards,” Kass said in an interview Monday on Bloomberg Radio.
“The possibility of an economic double dip in late ‘09 early 2010 has to be considered, particularly in light of the heavily indebted consumer coupled with all these proposed tax rate increases by the new administration,” Kass said.
During the fourth quarter of last year, the economy shrank at a 6.3 percent annual rate, the weakest performance since the recession of 1982, according to revised figures issued March 26 by the Commerce Department.
According to a monthly Bloomberg survey of economists released April 9, gross domestic product probably contracted at a 5 percent annual rate in the first quarter of this year and will drop at a 2 percent rate in the current quarter.
The economy will then resume growing at a 0.4 percent pace in the third quarter, and register a 1.5 percent growth rate during the fourth quarter of this year, according to the Bloomberg survey.