In his latest national economic forecast, UCLA Anderson Forecast Director Edward Leamer holds to his belief that the U.S. economy is not in a recession.

He adds that there is no recession to be feared in the immediate future, while admitting that there is a tenuous aspect to forecast.

"Our no-recession forecast remains nervously intact. We see a lot of problems in the first half of 2008, as housing remains a drag on GDP growth and weakness in personal consumption contributes as well," he writes.

"We expect one quarter of negative GDP growth. The Fed continues to dish out good news for Wall Street with ever lower interest rates. The labor market is sluggish and unemployment elevates to 5.5 percent by the end of 2008," Leamer writes.

"But the housing drag on GDP dissipates in the second half of the year and a normal economy returns in 2009."

According to Leamer, the recession risk is rooted in the insolvency problems that lending institutions currently face.

"But until I see evidence of a decline in spending by consumers and businesses because of credit problems," he writes.

"I am going to believe that this is just another symptom of 'recession depression.' Main Street is doing well, even as Wall Street suffers."

In an accompanying piece, UCLA Anderson Forecast senior economist David Shulman says that the U.S. economy has "become enveloped in an ever widening and deepening credit recession, as distinguished from an economic recession, that is working to constrict borrowing to all but the most credit worthy borrowers."

In "The Credit Recession," Shulman notes that lenders, once fearful of not making loans, are now fearful of making them, as credit losses multiply.

Credit losses in the system are now in excess of $150 billion, on the way to $400 billion. The credit recession has wide-ranging implications in many areas, from high-yield bonds to home mortgages.

The turmoil in the debt markets has been accompanied by a drop in stock prices.

Ultimately, Shulman describes the current economy as "a perfect storm consisting of the worst credit crunch in decades, falling house prices and $100 oil."

"If history and global experience is any guide, the hangover from the mid-decade credit boom could last for quite some time," Shulman warns.

In California, the economic outlook continues to mirror that of the nation, despite questions by some regarding the possibility of a state recession in the absence of a national recession.

The Anderson Forecast concludes that California is too closely tied to the nation for such an occurrence, and the outlook appears much the same — slow growth as the fallout from the real estate sector slowly works its way out of the economy.