The big discussion at the NAHB's annual spring economic forecast this morning was whether the U.S. economy was in a recession. However, several economists argued that the discussion may be irrelevant because the economy is in a state of flux. Economic conditions, particularly for the housing industry, have been dreadful, but against a global backdrop, they saw a more promising picture.

"Three out of four Americans think we are in a recession," said Jim Glassman, chief economist for JP Morgan. "If you mean by that that things aren't good, I'll agree with it. But if you mean the wheels are falling off the wagon, I don't think we're there."

The economy has struggled under what Nariman Behravesh, chief economist for Global Insight, called the "double shock" of the subprime crisis coupled with record-high oil prices. Moreover, dramatic declines in home prices have added economic stress by "really screwing up the financial markets," as NAHB chief economist David Seiders put it.

And the pain is likely to last a bit longer, as economists such as Behravesh have modeled a double dip into economic recovery forecasts. He said he expected the economy, as measured by GDP growth, to continue its slide in the first half of 2008. He also anticipated that the new fiscal stimulus package would pull some economic growth into the back half of 2008, although the growth would be short lived; the economy would again contract in early 2009.

For housing, the outlook varied slightly, according to Seiders's industry forecast. He said he believes new single-family home sales will hit a trough by mid-year and begin to improve while single-family housing starts will bottom out at the end of the year. But even with those improvements, he said, housing, as measured by residential fixed investment, would remain a "pretty heavy drag on the economy" for the remainder of 2008, with positive contribution happening no sooner than the first quarter of 2009.

Although economic conditions will likely worsen before they improve, the current economic climate isn't the worst it's ever been. At least that was Behravesh's point when he compared the current banking crisis with other recent banking crises, such as the Japanese banking crisis triggered in the 1990s and the U.S. S&L crisis from the mid-1980s.

"Twenty years ago--during the S&L crisis--every year, 200 banks closed their doors," he said. "We've had nothing remotely close to that."