Economists say goodbye to recession
The worst U.S. recession since the Great Depression has ended, but weak household spending as the labor market struggles to create jobs will slow the pace of the economy’s recovery, according to a survey of economic forecasters released today.
The survey of 44 professional forecasters released by the National Association of Business Economists (NABE) found that 80 percent of the respondents believed the economy was growing again after four straight quarters of declines, Reuters reported.
“The great recession is over,” said NABE President-elect Lynn Reaser. “The vast majority of business economists believe that the recession has ended, but that the economic recovery is likely to be more moderate than those typically experienced following steep declines.”
The current recession started in December 2007; it is the longest and deepest since the 1930s.
The NABE survey, conducted in September, predicted real gross domestic product will grow at a 2.9 percent pace over the second half of this year. Output for all of 2009 is expected to contract 2.5 percent and rebound to growth of 2.6 percent in 2010.
Much of the anticipated recovery was seen driven by businesses rebuilding their inventories after aggressively reducing unwanted stocks of unsold goods to match weak demand.
The survey predicted that the unemployment rate would rise to 10 percent in the first quarter of 2010 and edge down to 9.5 percent by the end of that year. The labor market was not expected to regain most the jobs destroyed in the current recession until 2012 or beyond.
The weak labor market would continue to weigh on consumer spending, slowing the recovery. The jobless rate climbed to 9.8 percent in September — a 26-year high — from 9.7 percent in August.
Respondents also expected the U.S. dollar to weaken further this year and into 2010, but did not see this contributing to a narrowing of the country’s trade deficit as the economic revival stimulates demand for imports.