University of Michigan economists said Thursday that the U.S. is in fact in the midst of a recession and that the worst won't come until the middle of next year.

The economists said in a press release that they expect only modest economic growth in 2010, with unemployment above 8% throughout that year.

"The decline in employment that began at the turn of the year raised the specter of recession," said Michigan economist Joan Crary in a prepared statement. "Until the credit markets seized up, however, it appeared that the economy might squeak by with a 'growth' recession, enduring a period of job loss and very sluggish growth, but avoiding a full-blown recession. The financial crisis tipped the balance, curtailing economic activity and plunging the economy into a downturn.

"While the current financial crisis is an extreme event that has raised fears of economic collapse, we are not forecasting economic catastrophe but rather a recession that is best characterized as moderately severe," she continued. "And that moderate severity stems from the early enactment of a significant package of fiscal stimulus measures, including infrastructure spending and tax cuts."

Crary and her colleagues Stanley Sedo and Janet Wolfe believe that even with a "significant" fiscal stimulus package in place by early next year, real gross domestic product will be down 1% next year followed by a 2% advance in 2010.

Additionally, the U.S. will likely lose roughly 2.4 million jobs in the next 18 months before employment gains return in late 2010.

The Michigan economists say the current recession won't be as bad as the recessions of 1974-75 and 1981-82, but it will be worse than the 1990-91 and 2001 slowdowns.

"Overall, the outlook is extremely uncertain, but any improvement clearly hinges on the return of a functioning credit market," Crary said. "Fortunately, economic crises of this magnitude are rare. The contractionary shocks to the economy have been severe and widespread. We expect, however, that the set of policies put in place to address the crisis will be successful."

This article was written by a staff member of TheStreet.com.