Jul. 10--Americans already are experiencing the consequences of recession, a group of Nebraska economists said Wednesday. But they predicted that the U.S. economy, though weak, would avoid a significant decline and high inflation this year.

The group said Nebraska's economy, boosted by strong farm income, will outperform the nation's this year, gaining some jobs and income even off the farm.

The 11 economists meet twice a year to discuss trends and issue a report through the University of Nebraska-Lincoln's Bureau of Business Research.

As it was six months ago, the U.S. economy is "on the brink of a recession," Wednesday's report said, with food and energy prices rising, jobs declining and home foreclosures gaining.

Yet the economy overall is growing slightly, according to latest figures. If the nation falls into a recession, the report said, unemployment will rise sharply and inflation will spread.

But the economists said exports are rising, consumers and financial businesses are working through their difficulties and inflation is limited. Barring major new problems, they predicted, the nation's economy should have weak growth in 2008 and 2009 and return to average growth in 2010.

Nebraska, they said, has limited problems with housing markets and is home to agriculture-related manufacturers enjoying strong demand.

They expect slower employment growth in Nebraska in 2008 and early 2009 than in 2007, with the job picture recovering by mid-2009. After growing strongly in 2007 and 2008, farm income will keep most of its gains in 2009 and 2010.

The economists' comments by economic sector:

--Farm income: Record exports and demand for fuel grains have caused farm income to surge, offset partly by increased prices for fuel, fertilizer, seed and rent on farmland. High grain prices mean slim profit margins for livestock feeders. But overall farm income should grow nearly 25 percent on top of last year's 30 percent.

--Overall employment: Job losses in manufacturing and information technology, plus slow growth in insurance, transportation and utilities, will be offset by growth in services and construction. Growth should increase in 2009 and 2010.

--Construction and mining: Setbacks in housing will be overcome by growth in nonresidential building to yield 2 percent growth this year. In late 2009, housing should recover, boosting jobs gained to an annual rate of 4 percent. Home sales should turn around next spring.

--Manufacturing: Thanks to farm-related manufacturing and stable food processing demand, jobs will decline only modestly in 2008 and 2009, then grow by 1 percent in 2010.

--Transportation and utilities: High fuel prices and lower demand for building materials and merchandise will reduce demand for drivers. Railroads will slow their hiring. Overall, jobs will grow by 0.9 percent in 2008.