The Center for Business and Economic Research at UT just released their business and economic outlook for fall of 2008 and the projections for the state of Tennessee and the nation as a whole are bleak.

National Forecast

As for the national outlook, the automobile market is facing a serious downturn, like the housing market, because of fewer loans being approved by banks. Along with the belt-tightening being done by banks across the nation, the report also states that unemployment will rise and potentially reach about 7.2 percent by next year.

I think we're going to see in the months ahead a very serious economic downturn. I am scared to death to think of what would have happened without the rescue plan.-Matt Murray, associate director of CBERThe $700 billion bailout has helped take some pressure off of the credit markets. Matt Murray, associate director of CBER, feels that although the bailout bill faced some harsh criticism, it was a necessary piece of legislation.

"I think it was an essential decision," said Murray. "I think we're going to see in the months ahead a very serious economic downturn. I am scared to death to think of what would have happened without the rescue plan."

Murray also believes that passing the bailout was the only option that would effectively help the country at the time.

"The option of doing nothing was not an option," said Murray. "It would have lead to a U.S. or global depression. I don't think it was an ideal package, but I think it was something necessary to forestall a much more serious downturn."

Some growth is expected next year, but according to the report, "The short-term outlook for the national economy is nothing less than grim."

Murray also states in the report that an economic rebound will be slow because banks are less willing to loan and will likely hoard cash. As confidence in the economy is regained, the banks will begin lending more freely and eventually the economy will bounce back.

Tennessee Forecast

As for the economic outlook in Tennessee, the report is not very optimistic. According to the report, "There is still considerable uncertainty over the depth and breadth of the ongoing downturn.

"Newly-released economic data for the state continue to show deterioration and fail to reveal a bottoming out, let alone a turnaround in growth. There is no upside potential for growth through 2009, only downside risk."

Murray is convinced that the downturn in the state economy has already begun negatively affecting students and faculty, and will continue to do so as the situation worsens.

"I think what it's doing to the university, is it's certainly effecting moral," said Murray. "The budget cuts we've seen and that we're likely to see are certainly going to hurt the academic programs we offer to students."