According to the survey, 74% of the forecasters believe the recession will end in the third quarter, with 19% pegging the fourth quarter as the final quarter for the recession. The remaining 7% believe the first quarter of 2010 will be the recession's swan song.
The AP quotes NABE president Chris Varvares as saying, "While the overall tone remains soft, there are emerging signs that the economy is stabilizing. [...] The economic recovery is likely to be considerably more moderate than those typically experienced following steep declines." Sure sounds like he is warning that the recovery is not going to be extremely powerful. That said, a recovery is a recovery and I expect investors to welcome this news with open arms today.
The news about the recession ending may overshadow the NABE's other prediction that unemployment will continue to climb throughout the year, even if there is a rebound. The group believes that companies will not scurry to hire workers until they believe the recovery is fully underway. Unemployment rate should average 9.1%, which is 5.8% higher than a year ago and is higher than the 25-year peak of 8.9% according to NABE's predictions.
If unemployment indeed averages 9.1%, it would be the highest percentage since 9.6% in 1983. Some forecasters even predict the unemployment rate could go as high as 10.7% in the second quarter of 2010.
Although the NABE economists believe the "worst is already behind the country in terms of lost economic activity," the group predicted that 2009's performance would be poor. The group widened its forecast for economic contraction to 2.8% from February's forecast of 1.9%, which would be the worst annual contraction since 1946.
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Reader Comments (Page 1 of 1)
5-27-2009 @ 11:42AM
Duke said...
After the GM debacle is done, the bottom will be close at hand. There will be more forclosures, and bankruptcies from individuals as well associated businesses. Cities in Michigan have more for sale signs in front of about every third business front. Michigan will be the last to see any kind of recovery, if at all. The rest of the country will have to get use to less pay and hours worked as well as fewer job opportunities for a few years yet. The purchasing power of Americans will not be like it was the last 30 years. It will not be in our lifetime that we will see a robust economy like we got use to. Those days are gone. The government is in debt and will not have the revenue to pay the interest with just service jobs. Green jobs will not be plentiful like the old days of factory work was. Americans will just have to get use to spending less money and that translates into a sluggish economy for a long time.