J.P. Morgan forecasts deeper recession in U.S., Europe

J.P. Morgan Chase's economics team on Friday said it cut its outlook for the U.S. and Western Europe to reflect a deeper recession. "Weak data, striking declines in October surveys and poor financial performance," prompted the investment bank to lower the average pace of growth for the two regions by a full percentage point for the third and fourth quarters. Economists led by Bruce Kasman lowered their views on the fourth-quarter U.S. growth rate to -4% from -2%. They still expect the Fed to cut its benchmark lending rate by a half percentage point next week and a quarter point in December. For Britain, J.P. Morgan anticipates the economy will contract 2.75% for the next two quarters, down from a -2% drop previously forecast. For Europe, the bank sees growth shrinking 1.5%, worse than a 0.5% drop previously.