Leading economists declare end to recession
The recession, which began in December 2007, has ended but the nation still faces a long slow recovery, according to economists surveyed by the National Association for Business Economics. More than 80% of respondents to the quarterly NABE survey said they believe an expansion has begun. “The good news is that this deep and long recession appears to be over, and with improving credit markets, the U.S. economy can return to solid growth next year without worry about rising inflation,” according to Lynn Reaser, chief economist at Point Loma Nazarene University and NABE president-elect. Even with the recovery, the NABE panel forecast the unemployment rate to increase to 10% in the first quarter of 2010 from the current 9.8% and to edge down to 9.5% by the end of the year. Almost all of the panelists (92%) said it would take until at least 2012 to recover all of the jobs lost in the recession. The majority of respondents – 54% — said the jobs lost in the recession – 7.2 million through the employment report for September – would not be recovered until 2012; 33% said the job losses would not be recouped until 2013 and another 5% said it would take even longer. The start and end date of recessions – technically the top and bottom of a business cycle – is determined by the Business Cycle Dating Committee of the National Bureau of Economic Research. The peak of the cycle would mark the start of a downturn and the bottom the beginning of a recovery. The housing recovery, respondents said “will gather momentum” with housing starts growing 38% and residential investment 8% from current “depressed levels.” The panel said 2010 would be the first year since 2005 that the housing sector will contribute to overall growth. After bottoming out this year, house prices, they said, would see a “modest gain of 2% in 2010. About two-thirds of respondents said bottom in 2009.
Source: Mark Lieberman, senior economist, FOXBusiness