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Economists See Recession Ending in Second Half

The U.S. economy should emerge from the recession in the second half of this year as consumer spending and the housing sector bounce back, although unemployment will rise well into 2010, according to a survey of economists. The Blue Chip Economic Indicators survey revealed that 86% of respondents believe the economic downturn will be declared to have ended in the second half. "Real GDP contracted very sharply during the first quarter of this year and will continue to shrink, albeit more slowly in the second quarter before turning very modestly higher in the third and fourth quarters," the survey said. The Blue Chip survey, noted that improved consumer spending - which accounts for over two-thirds of U.S. economic activity - will be supported by tax cuts from the government's $787 billion stimulus package, the extension of unemployment benefits and lower inflation. But even with the expected improvement, companies will likely continue laying off workers well into 2010, the survey revealed.

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Date Last Updated: 04/20/2009